French Connection closer to profitability after slimming down high street presence
French Connection today said it was close to achieving profitability, despite the continuing challenges of the retail market, after a year in which it has slimmed down its high street presence and invested online.
The retailer, a Top250 trader in IRUK Top500 research
, closed 11 stores over the year, while opening a new concept store in Manchester, and aims to close more during the year. Online sales grew by 3.1%, meanwhile, to represent 29.7% of retail revenues. Of that, 46.8% of sales were via mobile devices. French Connection said it had focused on a full-price online trading strategy over the year, and was now investing in the site infrastructure to improve both its speed and flexibility.
Stephen Marks, chairman and chief executive said: "We have made considerable progress across the group over the last year and I enter the new financial year with renewed confidence off the back of that success. Our goal has been to return the group to profitability and I believe we are very close to achieving that aim, given the momentum that we are currently seeing within the business.
"While it is clear that the retail market in which we are operating in the UK is unlikely to improve in the near future, we have clear visibility on the benefits we will obtain from the ongoing portfolio rationalisation. In addition the reaction to our collections and strength of our wholesale orders both for the spring and winter seasons further underpins the performance going forward. Although we are only early into the year, I believe we are in a very strong position to make significant progress again."
Group revenue of £154m in the year to January 31 was 0.5% ahead of last year, when sales had fallen by 6.7% to £153.2m. The contribution from retail improved – declining by 5.5% to £83.1m – as a result of the store closures reduced retail space reduced by 11.3%. By year end, the retailer had 116 owned stores, down by 6.5% from 124 a year earlier, and 212 franchised, licensed or joint venture stores, down by 25.6% from 285 a year earlier.
Income from wholesale rose by 8.6% - or 7.1% when currency fluctuations were discounted – as a result of sales in the UK, Europe and North America.