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French Connection has revealed it has swung to a £2.9m loss for the full-year period ending 31 January 2020 and has warned of “continued difficult trading conditions”.
The underlying loss comes after a restated underlying profit of £0.8m the previous year. Group revenue was also down 11.4% to £119.9m compared with £135.3m the previous year.
In addition, French Connection revealed a decline in LFL sales in UK and Europe of 2.5% (2019: down 6.8%), which the retailer said was impacted by the planned closure of stores and the “difficult retail trading environment in the UK” – especially in the second half.
It also confirmed the planned closure of non-contributing stores continued with 11 stores and three outlets closed in the period, with the closure of the China and Hong Kong joint venture during the year contributing £0.5m loss.
Stephen Marks, chairman and chief executive, said: “The performance this year has not been as anticipated and we are not being assisted by the continued difficult trading conditions in the UK and potential uncertainty due to the COVID-19 coronavirus.
“I am however, pleased with the continued good performance of the wholesale business in the USA and we have good forward order banks in the UK to be delivered during the first half of the year. The initial reaction to the winter ranges has been positive, particularly at our recent New York Fashion Show.”
He added: “We believe the trading landscape in the UK is unlikely to improve in the short term and this has a potential impact on both the retail and wholesale businesses.
“Against this background we are working hard to ensure we are operating as efficiently and cost effectively as possible while working closely with all our trading partners to maximise business with them.”
