French Connection posts another year of losses

Fashion retailer French Connection has reported a loss for the fifth year in a row on Tuesday.

In its preliminary results for the year ended 31 January 2017, the company said it made a pre-tax loss of £5.3m, wider than the £3.5m loss in 2015, as group revenue dropped 6.7% to £153.2m.

French Connection attributed the revenue fall to a combination of store closures and a decline in wholesale, the majority of which occurred in the first half.

Meanwhile, like-for-like sales in the UK/Europe grew by 4.4%, despite a challenging trading environment in the second half. Overall retail revenue was down 4.9% to £87.9m, while ecommerce sales rose 12.7% and now make up 27.3% of retail revenue.

Two stores have already closed after year-end and an additional six stores are earmarked for closure this year, bringing the group closer to the target of 30 full price French Connection stores by January 2019.

Chairman and chief executive Stephen Marks said: "We have seen an improvement in performance over the financial year with continued good progress in the UK/Europe retail business, but as previously reported, this has been partly held back by the wholesale and licensing divisions, particularly in the first half of the year.

"The noticeable improvement we have seen during the second half and into the new financial year leads me to believe that we are moving in the right direction. The reaction to this year's collections has been very strong so far with sales both in our stores and wholesale customers up on last year. It is early in the year and we have a considerable amount of work to do to take the group back to profitability although I believe that the actions we have taken and continue to take, will go a long way to achieving that goal this year."