French Connection [IRDX RFCN] today reported improving sales and a growing shift to online shopping, following restructuring aimed at ensuring the group reflects the changing way that customers now buy.
The fashion retailer, a Top150 trader in IRUK Top500 research, said in half-year figures today that it had worked to right size the business “to reflect the ongoing structural changes we are seeing in the retail market”. That’s included closing seven stores over the last year, and the retailer now plans to close three more during the current financial year, while opening a new one in Manchester.
Group revenue came in at £68.1m in the six months to July 31. That’s down by 1.6% on the same time last year – or by 4.2% when exchange rate fluctuations are discounted. Retail revenue fell by 7.5% to £38.5m but there was growth in wholesale (+7.2%, or +2.6% in constant currency) and licensing (+8.3%). Like-for-like retail sales in the UK and Europe stayed “broadly flat”, falling by 1%, reflecting the closure of seven stores over the last year. Pre-tax losses reduced to £5.7m from £7.9m last time, with retail operating losses reduced by 18.3% as the company reduced its use of discounting.
Some 29.2% of retail sales took place online – up from 26.5% at the same time last year. Almost a third (31%) came via mobile devices, up from 24.1% last time, while traffic from mobile reached 45.4% of visits, up from 36.4%. The retailer said it had invested in its ecommerce CRM (customer relationship management) platform and was also running targeted social media advertising.
Stephen Marks, French Connection chairman and chief executive, said momentum had built in the first half of the year, with “improvements across all divisions despite difficult trading conditions.” He added: “With full price sales in retail up during the early part of the second half, combined with the strong Winter 17 order books in wholesale and very strong reaction to the Spring 18 collection, I am confident we will see a good performance during the rest of the year.
“We have been working with the goal of returning the group to profitability as soon as possible and, while there is still much to do, I believe we have made significant steps to achieve that in the near future.”
The retailer also said that Sarah Curran, co-founder of My-Wardrobe.com and more recently managing director of Shop Direct Group retail brand Very Exclusive, and Robin Piggott, previously chief financial offer of Moss Bros Group, had joined its board as non-executive directors.
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