French Connection sales fell both online and in stores in the first half of its financial year as the retailer closed branches – including on London’s Oxford Street – and focused on improving the customer experience on mobile.
The fashion retailer, ranked Top350 in IRUK Top500 research, today reported group revenues of £51.0m in the six months to July 31. That’s 12.2% down on the same time last year, reflecting the continued closure of French Connection stores as well as the moving of wholesale shipments into the second half of the year. At the bottom line the retailer reported a pre-tax loss of £4.7m, improved from a loss of £15.1m last time.
Talks about the possible sale of the business were ongoing, with the process now expected to be complete by the end of its current financial year, following a second extension.
Direct retail revenues accounted for less than half of French Connection sales, coming in at £23.8m (-12.8%) as ecommerce revenues fell “slightly” and its store network was reduced from 103 outlets in July 2018 to 90 in July 2019. Its Oxford Street store was among seven stores to close during the first half, although a new Studio concept store opened in nearby Duke Street to showcase exclusive and curated product ranges. “The result so far has been encouraging,” said French Connection in today’s figures, “but it is still early days.”
Although ecommerce revenues were down, online accounted for a growing share of direct sales, at 22.3% from 21.5% last time. Almost two thirds (63.6% 2019, 56.4% 2018) of online visitors - and 48% (41.9% 2018) of sales – arrived via mobile. The move to mobile came as a new ecommerce team focused on improving CRM capability and targeting advertising via social media. The team will continue to focus on improving the customer experience for mobile users using tools from personalised communications to improvements to the customer experience – aimed at boosting engagement and conversion – and increased investment in digital marketing – to drive traffic. “As we further develop the site, the key focus is very much on the experience for mobile users and the activity generated through mobile continues to grow,” said French Connection chairman and chief executive Stephen Marks.
Of its remaining 90 outlets, 36 are French Connection UK and Europe stores, and three are YMC. The retailer also operates 49 concessions and two stores in the US. Like-for-like retail sales in the UK and Europe improved by 1.4%, where last year they were down by 7%. Wholesale revenue of £27.2m was 11.7% down on last time as European customers moved shipments to the second half of the year. However French Connection said it was seeing growing order levels both from European online retailers and from US department stores, including Bloomingdales and Nordstrom. Licensing income of £2.7m remained steady on last year (£2.6m) as sales of its DFS range of sofas grew.
Marks said: “I am pleased that the changes we have made to the business over the last few years continue to move us forward. There is no doubt that progress has not been helped by the trading conditions in which we operate in the UK, although our retail performance has been resilient, overall the wholesale business is strong and we continue to see good stability in the licence income. The order books we have provide a clear outlook for the second half of the year in wholesale but it appears that retail conditions will continue to be challenging. Underpinned by these results we remain fully on track to achieve our expectations for the financial year.”
Image: Screenshot of frenchconnection.com