French Connection expected to post ninth consecutive year of losses

Troubled high street retailer French Connection is expected to post its ninth consecutive year of losses tomorrow along with a further deterioration of its cash position.

Analysts are expecting the retailer to announce that its profit position has not improved on last year's £3.5m loss and that its sales have dropped to around £155m from last year's £164.2m, according to The Sunday Telegraph.

The publication also reports that it expects French Connection to reveal that it has negotiated more favourable terms on the rent of its Oxford Street flagship store from landlord Selfridges. It had previously been speculated that it would be forced to sell the leasehold of the store, which runs until 2025, to improve its cash position and that US activewear brand Under Armour would take it over.

French Connection also needs to make urgent appointments to its non-executive board. Christos Angelides, the former product director of Next and a highly regarded figure on the British high street, was obliged to stand down last month when he was appointed CEO of rival Reiss and two others, Dean Murray and Claire Kent, have reached the nine-year service point, which means they can no longer be classified as independent and must be replaced.

Founder Stephen Marks is also under pressure to consider his own position of chairman and chief executive. Marks, who founded the business in 1972, has faced calls from activist shareholder Gatemore Capital Management to split the role which is a contravention of corporate governance. This joint role and Marks' 42% shareholding have made it hard for shareholders to effect change at the business.

Last month Mike Ashley's Sports Direct was revealed to have snapped up an 11% stake in French Connection after long-standing shareholder Schroders bailed out and offloaded its 9.27% stake (it is believed Sports Direct acquired its remaining shares on the open market). Sports Direct's intentions are not clear and it is understood the two parties have not yet had contact.