French Connection‘s half year results has shown the company made an underlying loss of £12.2m in the six months to 31 July, compared with a loss of £3.6m during the same period in 2019, as Coronavirus led to a “significant decline” in sales.
Bosses revealed sales in the six months to July 31 plunged 53% to just £23.9 million with pre-tax losses extended from £4.6 million to £13.2 million.
All French Connection stores were closed from March 23 until June 15 and, although bosses saw a slight uptick in online sales of 8.2%, it was not enough to offset the losses.
Wholesale revenues – sales to department stores and online retailers – fell 49.3% to £13.8 million, and store sales dropped 57.6% to £10.1 million, although this was also due to the permanent closure of nine retail sites.
French Connection has struggled for several years to keep its place on the high street as bosses failed to keep up with the changing face of the market.
Geographical revenue analysis highlights that UK Europe proportion of sales decreased to 67.0%, driven by a strong performance in the US wholesale business, increasing the North America share of global revenue to 30.5%.
The chain said it was confident in its survival and believed the £15 million lifeline secured by restructuring specialists Hilco would be enough to see it through the pandemic restrictions with a “reasonable expectation to continue in operational existence for the foreseeable future”.
Founder and CEO Stephen Marks, said: “This has undoubtedly been the most difficult trading period that the group has ever faced and I would like to thank our staff, both those who have kept the business running and those who have been on furlough, for their ongoing commitment to French Connection.
“Despite the unprecedented difficulties we continue to face alongside the rest of the high street, having been able to secure the necessary financing we feel that we are well-positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise, especially given the good performance of wholesale, while maintaining a very tight control of costs.
“Since the French Connection stores reopened, we had seen a gradual sales build from a low base, however since the recent revision and further lockdown guidance, this has reversed slightly. Although the finalisation of the winter order books was disrupted by the lockdown, the wholesale customers are growing in confidence in the UK, with their intake of winter goods improving and reorders running ahead of last year driven by more casual product.
“Given the overall continued uncertainty about how trade will be over the next few months, and particularly with the biggest trading period of the year still to come, it is imperative that we focus our attention on cost control and preserving cash.”
Since stores reopened, sales have built gradually, the company said, although customer numbers remain low amid local COVID-19 restrictions, despite shops remaining open.
Despite the low customer numbers, French Connection reports to have had a very good reaction from customers to their Summer 21 collection.