French Connection warns of further store closures as sales dive
French Connection this morning warned of further permanent store closures in the coming months as the high street store reported that sales have plummeted due to the coronavirus pandemic.
The struggling retailer, which closed nine stores in the first half, said it continued to target the closure of non-contributing sites and expects to shutter more in the second half.
Chief executive Steven Marks said the pandemic had been the most challenging period the firm, which he founded in the 1970s, had ever faced.
French Connection reported group revenue of £23.9m, down 53.1 per cent from £51m last year, due to the impact of the pandemic.
The retailer’s underlying loss widened from £3.6m last year to £12.2m this year, driven by the steep decline in sales and additional one-off stock provisions.
Wholesale revenues plunged 49.3 per cent to £13.8m due to the closure of customers’ stores, although some deliveries continued to online operators.
Retail revenues dropped sharply by 57.6 per cent to £10.1m, reflecting the UK coronavirus lockdown as well as the closure of nine French Connection stores.
The firm said it achieved cost savings through rent reductions negotiated with landlords, rates and furlough assistance.
“This has undoubtedly been the most difficult trading period that the Group has ever faced and I would like to thank our staff, both those who have kept the business running and those who have been on furlough, for their ongoing commitment to French Connection,” Marks said.
“Despite the unprecedented difficulties we continue to face alongside the rest of the high street, having been able to secure the necessary financing we feel that we are well positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise especially given the good performance of wholesale, while maintaining a very tight control of costs.”