REPORT French Connection, announcing its preliminary results for the year ended January 31, 2015 said that it witnessed improvement in financial performance with reduced underlying operating loss of 0.8 million pounds (1.1 million dollars), in line with market expectations, driven by strong performance in wholesale and licensing business, closure of non-contributing stores, continued cost control and some margin progression in its retail operations.
Group revenue of 178.5 million pounds (263.5 million dollars) was down 5.8 percent or 4.1 percent at constant currency on a reduced retail store portfolio, with nine non-contributing stores closed during the year. UK/Europe retail like-for-like sales were down 3 percent but there was 4.6 percent growth in wholesale revenue or 7.3 percent on constant currency basis.
Commenting on the results, Stephen Marks, Chairman and Chief Executive said, "In spite of difficult retail trading conditions in the second half of the year, these results show that we have made another step towards returning French Connection to profitability. Although we are encouraged by forward orders in our wholesale business, trading on the high street remains challenging and we are planning accordingly.”
Composite gross margin of 46.7 percent against 47.6 percent in 2014 reflected the higher mix of wholesale sales within group revenue. UK/Europe retail gross margin was up 50 basis points on lower discounting, and UK/Europe wholesale gross margin up 170 basis points.