French Connection losses narrow on the back of strong wholesale performance as the retailer’s £29m buyout nears
- Revenues down 21.2% on 2019 levels to £40.2m in the six months to 31 July
- But profits narrowed 75% from £3.6m to £0.9m amid strong wholesale figures
- CEO Marks is set to retire upon completion of the firm’s impending acquisition
French Connection saw losses narrow in the first half of this year, with the fashion chain buoyed by continued improvement in its wholesale business.
In what may be French Connection’s final report as a publicly listed entity, it revealed profits had reduced from from pre-pandemic levels of £3.6million to £900,000 in the six months to 31 July.
The struggling chain revealed group revenues of £40.2million for the half, which marks a 21.2 per cent decline on the same period in 2019.
French Connection saw retail losses of £2.5m but its wholesale unit delivered profits of £4.5m
Retail revenues were up 12.9 per cent compared to the same period in 2020, but remained 52.1 per cent below pre-Covid levels at £11.4million.
But wholesale revenues showed greater improvement, up 108.7 per cent on 2020 and 5.9 per cent on 2019 at £28.8million.
Overall, French Connection’s retail business saw a loss of £2.5million, a 51.9 per cent improvement on 2019 levels, while the wholesale unit saw a profit of £4.5million.
More recently, retailers have seen their post-pandemic recovery stall as sales slowed to their weakest performance since firms were under lockdown restrictions, with the latest BRC-KPMG retail sales monitor showing a negative trend heading into the key Christmas trading period.
Analysts say fears of fuel shortages have prompted consumers to limit shopping journeys to essential trips and wetter weather was another reason for the downturn
But chairman, founder and CEO Stephen Marks welcomed French Connection’s ‘improvement in business’ this year.
He added: ‘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.’
Last week Marks finally agreed the sale of his struggling business, in a deal that values it at £29million.
It has been sold to a consortium called MIP Holdings, which including its second-largest shareholder, at 30p per share.
Upon completion of the deal, Marks will retire.
He said: ‘The board has concluded that the offer being made by MIP Holdings 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.’