French Connection "accomplishes a great deal" in 2013

Wednesday, 12 March 2014
Life is bright for French Connection yet again. The British fashion brand has substantially cut losses and shown signs that point to a recovery. In words of Stephen Marks, chief executive and chairman, the company has "accomplished a great deal in the past year". Turnaround plans are bearing fruits for French Connection as the once popular brand has shut down loss-making stores, revamped its remaining sites, and refitted its male and female clothing ranges with a new design team.

"There is still much to do and I am confident that we are on the right path and have the right strategy to drive further progress," summarised these implementations the first executive at the fashion retailer.

The bulk of the improved performance came from its retail division, which reduced operating losses by 3.8 million pounds over the year, driven by its UK and European business. Revenue was down 4 percent to 189.4 million pounds as the company reduced its store portfolio as part of its turnaround plan.

French Connection halves pre-tax losses in H2

Like-for-likes sales increased 1.4 percent in the UK and Europe in the second half of the year to the end of January, well ahead the 4.5 percent dip registered in the first six months of 2013. In fact, like-for-like sales for the year declined by 1.4 percent, that´s less than for the same period a year earlier, when it lost 7 percent last year.

Referring in particular to pre-tax losses, which have almost halved from 10.5 million pounds to 6.1 million, CEO Marks said: "Overall, there has been significant positive change across the business during the year."

"We have felt the benefit of the new team who have now been in place for over a year and have made considerable impact across many areas. More recently we have been pleased with the reception to our spring range," further disclosed French Connection CEO.

"We have accomplished a great deal in the past year and will build on that momentum to deliver further improvements. We strengthened management across our business resulting in improvements in performance. Our new design team is working well; changes in our retail buying resulted in much better stock control; stores are operating more efficiently and the investment in our e-commerce business delivered good results."

"We are pleased with where we've got to. We still think there is an awful to do and we still think there is a lot to go for, but we definitely think there is momentum in the business and that the initiatives are gaining traction," Neil Williams told The Wall Street Journal after the company's earnings release.

The retailer revealed as well that it plans to close another three to five stores in this financial year, to add to those ten stores it shut in the 12 months to Jan. 31. Most of them will be in the company´s local market, the UK, although one closure might take place in the US.

In an interview with the 'Wall Street Journal', Williams, COO at French Connection, reminded that the company hopes to at least break even by the end of January 2015. "We made a significant step [towards that], but it will still be dependent upon how we'll trade through this year," Williams said.

Angela González Rodríguez

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