French Connection today said it was taking itself off the market as it plans to focus instead on its turnaround – and said it may report a pre-tax loss of up to £2m this year.
The fashion retailer, ranked Top350 in IRUK Top500 research, has ended the formal sale process in which it was looking for offers for the business. Now it will work to invest in its online platform while ensuring that it has the right number of shops to serve customers. French Connection has previously said that it is working towards having 30 full-price shops in the UK. At this time last year it traded from 96 and from 195 concessions.
Online, French Connection plans to focus on improving the customer experience and to boost conversion. It will also spend on marketing as it looks to drive traffic to its site.
Wholesale has become increasingly important to the business in recent years and it now aims to work closely with its key wholesale customers, particularly in the US. At the same time, it plans to licence products in more areas of its business.
The update came as French Connection said it expected to report a pre-tax loss of between £1m and £2m in its current financial year, which finishes today. “UK trading in both the retail and wholesale businesses has been more difficult during the second half of the year, especially during the fourth quarter,” it said.
Last year the retailer reported returning to profit, with an underlying pre-tax profit of £0.1m, but bottom line pre-tax losses of £2.1m in the year to January 31 2019. In the first half of its current financial year, to July 31 2019, it reported a bottom line pre-tax loss of £4.7m, so a full-year loss of up to £2m represents something of an improvement. However, most fashion retailers do make more of their profits in the Christmas half of their financial year and would expect business to improve. Clearly French Connection has suffered in the difficult trading environment that it references today.
Image: Screenshot of frenchconnection.com