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Embattled retailer French Connection has announced a return to profit for the first time in seven years, despite experiencing a sales drop during “difficult trading” conditions.
Like-for-like sales during the 12 month period to 31 January fell by 6.8% due to decline in both in-store and online. However the company announced “as anticipated” it had returned to profitability posting underlying profit of £0.1m, compared with a loss of £2.1m the previous year.
Its wholesale revenue also rose 10.3% to £76.9m, but this was offset by its retail revenue dropping 10.6% to £58.4m. As a result total group revenue was marginally up 0.2% to £135.3m.
Commenting on the results, Stephen Marks, chairman and CEO, said: “I am pleased to report that we have achieved our target of returning the group to underlying profitability this financial year. This is only part of our overall journey, however it represents a significant achievement given the results over recent years.
“This has been achieved despite the ongoing difficult retail trading environment in the UK and is the result of the changes we have made in all areas of the business to adapt to the ever evolving markets in which we operate. While we still have a way to go to return the business to an appropriate level of profitability, I believe that we have made and continue to make significant progress. ”
The company added that preliminary discussions were still “ongoing” with several potential buyers of the business. In April last year, French Connection sold its 75% stake in fashion brand Toast to the Bestseller Group for £11.7m.
