French Connection today said its online business has stayed in positive territory through the autumn even though it decided to discount less this year than in previous ones. Its store business, however, has been hit first by social distancing measures and then by lockdown closures.
But the fashion retailer, ranked Top350 in RXUK Top500 research, says that trade has been “encouraging” since stores in England and Wales reopened this month.
Its wholesale business has “performed well” as its key online customers continue to trade and to take deliveries. Orders for Spring 2021, it says, are “currently ahead of our expectations”.
The retailer now has $6.5m over five years in funding, via the US Main Street Lending Programme, to support its US-based staff and operations in a largely wholesale operation.
“Looking forward,” says French Connection in today’s trading and financing update, “there will continue to be considerable challenges, with both the ongoing impact of Covid-19 and the uncertainty relating to Brexit but we feel we are well-positioned to capitalise on any opportunities that arise.”
Today’s update comes after a first half of its financial year in which French Connection’s online sales more than doubled as 56.4% of its sales took place online – up from 22.3% a year earlier. But sales from its own shops fell by 57.6% to £10.1m in the six months to July 31 from £23.8m last time, during what French Connection chairman and chief executive Stephen Marks described as “the most difficult trading period that the group has ever faced.”
Its overall revenues fell by 53.1% to £23.9m, while pre-tax loses came in at £13.2m.
In recent years, French Connection has decreased its reliance on the high street and on direct sales, with more than half of its revenue now via wholesale partners. More than a quarter of the business is owned by Frasers Group, giving it a place in Frasers’ ‘elevation without limits’ strategy and it is stocked within House of Fraser stores.