French Connection has revealed it is in “active discussions” with potential funding partners in order to seek emergency cash as the pandemic continues.
The move comes as the fashion retailer warned of a “continued expected weak trading environment” in light of the ongoing crisis.
It added that without securing additional funding, and should the pandemic continue to impact trading levels, its cash resources will “eventually be eroded in the coming months”.
Nonetheless, the board is reportedly “confident” of raising sufficient funds to support the business until it returns to trading levels that are “able to support the ongoing operations”.
According to French Connection the discussion with potential funders is “proceeding well”, with “good progress” so far made on due diligence and agreeing terms.
It comes as the retailer said that despite utilising the Job Retention Scheme and rates relief, access to other government funds has proven “very challenging”, and in light of “tight qualification restraints” it has been unable to access any further schemes.
Nonetheless, the group said that it is continuing its efforts to shore up cash and reduce costs as the crisis continues.
It is in “ongoing and generally constructive” talks with suppliers and landlords, for example, to confirm extending payment terms and agree to rent holidays or deferred payments.
The retailer is also in talks with factories to manage the supply of future goods to match current requirements while “reducing quantities to reflect the expected lower level of trade for the remainder of the year”.
Whilst its stores and concessions remain closed during the pandemic, its online sales across the UK and USA have risen 44% over the last six weeks. In addition, it has noted a small increase in activity in Europe as countries begin to open up.
In its latest update, the fashion retailer said it is now developing plans for the safe reopening of stores in line with government guidance.
In light of the government announcement of a phased reopening of stores from 1 June, it is now “planning to open up in an orderly manner to ensure everything required is in place”.
The retailer said: “We look forward to returning to more normal levels of trade as the situation evolves, although we do not expect this for some time to come.”