13th Oct 2020 10:27
(Alliance News) - French Connection Group PLC on Tuesday said its revenue fell by more than half during a first half battered by Covid-19.
The stock dropped 19% to 7.25 pence each in London on Tuesday morning.
In the six months to July 31, the retailer's revenue plunged 53% to GBP23.9 million from GBP51.0 million a year earlier.
French Connection's pretax loss stretched to GBP13.2 million from GBP4.5 million from a year prior.
"This has undoubtedly been the most difficult trading period that the group has ever faced and I would like to thank our staff, both those who have kept the business running and those who have been on furlough, for their ongoing commitment to French Connection," Chair & Chief Executive Stephen Marks said.
"Despite the unprecedented difficulties we continue to face alongside the rest of the high street, having been able to secure the necessary financing we feel that we are well positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise especially given the good performance of wholesale, while maintaining a very tight control of costs."
French Connection said it achieved cost savings and negotiated rent reductions with its landlords. The company's operating expenses were 37% year-on-year lower at GBP17.7 million from GBP28.3 million.
Most of French Connection's revenue came from its wholesale arm. Wholesale revenue was 49% lower year-on-year at GBP13.8 million. Retail revenue dropped 58% to GBP10.1 million, highlighting just how badly the company was hit by the Covid-19 lockdown.
Stores were closed between March 23 and June 15, French Connection noted, and sales only reached "low levels" when units reopened.
More promisingly, current trading is "in line with our expectations", the company said.
"Although the finalisation of the winter order books was disrupted by the lockdown, the wholesale customers are growing in confidence in the UK, with their intake of winter goods improving and reorders running ahead of last year driven by more casual product. We have also had a very good reaction from customers to the Summer 21 collection," French Connection said.
By Eric Cunha; [email protected]
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