Ecommerce accounted for more than half of French Connection retail sales in the first half of its finance year, with more than half of online sales taking place via mobile. The business now sells from 26 fewer stores of its own than it did before the Covid-19 pandemic, while retail sales have halved, compared to the same time in 2019. At the same time, wholesale has grown by more than 5% to account for nearly two-thirds of revenues; customers include a growing number of US department stores.
French Connection, which is ranked Top250 in RXUK Top500 research, turned over £40.2m in the six months to July 31 2021. That’s 68.2% more than at the same time last year – but 21.2% less than the same period in pre-pandemic 2019. Retail sales of £11.4m were 12.9% up on a year ago, but 52.1% lower than two years ago. Within that, ecommerce sales grew by 9.4% to £5.8m from £5.3m in 2019. Wholesale revenues came in at £28.8m, 108.7% up on last year, and 5.9% up on two years ago.
Gross profits of £12.7m derived from retail (44.7%) ahead of wholesale (26.4%). But at the bottom line, the retailer reported a pre-tax loss of £0.9m, narrowing from a loss of £13.2m a year earlier and a loss of £3.6m two years ago.
The fashion retailer, which is currently the subject of a recommended bid from MIP Holdings, today said that ecommerce accounted for 50.9% of its total retail sales in the first half of the year. That’s up from 22.3% two years earlier. Of those online sales, 59.8% were via mobile – up from 48.1% in 2019. Online traffic was 71.6% mobile, up from 63.7% in 2019. The change, says French Connection, has come as it focuses on its CRM capability and on targeted social media advertising.
Group retail space now stands at 104.7k sq ft, 30.7% less than two years ago, and 10.3% less than one year ago. As of July 31, French Connection had 64 stores that it runs directly, with a further 164 operated under franchise, licence or joint venture. At the same time in 2019, French Connection had 90 stores of its own with a further 185 operated by partners. Some 72% of sales took place in the UK, with 26.6% in North America and 1.2% in the rest of the world.
As reported last week, MIP Holdings has made a 30p per share bid for French Connection that values it at £29m, and which is recommended by the board.
Stephen Marks, chairman and chief executive of French Connection, says: ”I am pleased that the improvement in business we saw in the early part of the period has continued throughout the first half of the financial year. Wholesale in both the UK and the US has performed well, with a good outcome to the Summer season.
“Over the last five years, French Connection has made significant progress in its plans to rationalise the size of its store portfolio and to return the group to profitability. The board has concluded that the offer being made by MIP Holdings Ltd is fair and reasonable and recommends that all shareholders accept.
“Following completion of the transaction, I will retire from French Connection. This is an appropriate time for me to step back from the business that I founded in 1972, and I would like to take this opportunity to thank all our people for their contribution to our achievements over the years. I wish them all every success in the future.”