The struggling British fashion retailer has had a tough first half of the year, as it saw how its revenue was down by 7 percent to 96 million pounds. Also, French Connection reported a loss before tax of 6.3 million pounds for the six months to July 31, compared with a profit before tax of 700,000 pounds a year earlier.
"The last six months have continued to be very difficult for French Connection's UK/Europe retail business, which has had an impact on the Group results for the period," Chief Executive Stephen Marks said in a statement. Group loss before taxation for the first six months of the year was 6.3) million pounds, compared with a profit of 0.7 million pounds last year. Like-for-like sales at its UK/Europe retail division, which accounts for half of the company's revenue, fell 9.5 percent.
The British retailer said it completed a review of its retail business and have implemented several initiatives, including disposal of loss-making stores. It was in March when French Connection started a deep review of its British market, aimed to boost its ailing sales within its mainland. Then, they hired retail property specialists, Ashley Phillips Lahaise, to examine the sale of 14 flagship UK stores.
“We have completed our extensive review of the retail business and have implemented a set of detailed initiatives across a broad number of fronts designed to improve the performance of the retail division and the business in general. The operational focus of the initiatives is on improving our store operations, developing our product offering and improving merchandise management. In addition we have strengthened our senior management team and will continue to target the disposal of loss making stores. We are confident that these actions will produce a growing positive impact on our trading performance over the next two financial years,” Marks added in this respect.
However, it will take at least a couple of years until these initiatives start to show any improvement. "We expect that our initiatives will have a growing positive impact on our trading performance over the next two financial years," said Stephen Marks, French Connection's chairman and chief executive.
French Connection said its initiatives include developing better selling skills; improving its accessories ranges; and developing its ranges to meet the "aspirations" of its customers.