French Connection has grown sales and moved into profit – at an underlying level – in its latest financial year. The fashion retailer says that’s because it has succeeded in adapting to the fast-changing retail environment. Over the last five years, French Connection has closed half of its store estate while growing its wholesale business. As of January 31 it traded from 96 stores and from 195 concessions, including 43 French Connection stores in the UK and Europe. Its ultimate target is to have 30 full price stores in the UK.
The retailer, ranked Top350 in IRUK Top500 research, today reported sales of £135.3m in the year to January 31, by 0.2% from £130m a year earlier. Sales growth came via its wholesale business - which grew by 10.3% to £76.9m. Direct retail sales were down by 10.6% at £58.4m, as its own direct sales fell both online (-3.7%) and in stores. At the same time as direct online sales fell in value, they grew their share of sales. Online now represents 21.2% of group retail sales, up from 19.8% in 2018. The proportion of traffic coming from mobile also grew, reaching 56.8% of online sales, and up from 50.9% last year.
Like-for-like retail sales, which strip out the effect of closing 10 unprofitable stores and concessions during the year, were down by 6.8%, where they had been up by 0.8% a year earlier. However, said the company, its growing wholesale business came predominantly from pureplay and multichannel customers in the UK and Europe, and via department stores in the US. It said that uncertainty around whether House of Fraser would continue to trade was now over, with most shops still open. But it said that the House of Fraser online channel had been “particularly difficult after an extended closure of the site early in the second half of the year.”
French Connection chairman and chief executive Stephen Marks said the retailer had made significant progress. “This has been achieved despite the ongoing difficult retail trading environment in the UK and is the result of the changes we have made in all areas of the business to adapt to the ever-evolving markets in which we operate,” he said. “Whilst we still have a way to go to return the business to an appropriate level of profitability, I believe that we have made and continue to make significant progress.”