16th Sep 2013 08:42
LONDON (Alliance News) - Fashion retailer French Connection Group PLC Monday reported a reduced loss for the the first six months of its financial year as it continued a turnaround that has seen it close unprofitable stores, cut costs, order less stock, and reduce the duration of discount sales.
The company reported a pretax loss of GBP6.1 million for the six months to end-July compared with a loss of GBP6.3 million a year earlier, although revenues declined 6.4% to GBP89.9 million due to the store closures in Europe and the UK and weak demand in its wholesale business.
It said it had moved back its summer sale in the UK and Europe this year in an effort to shorten the sale. That meant like-for-like sales were down 4.5%, but gross margins rose to 48.9%, from 48%, as it sold more at full price.
French Connection's cash position improved further, to GBP22.3 million by the end of the period, from GBP21.2 million a year earlier.
"We have recently launched the Winter collections and the reaction has been encouraging although it is still early in the season," Chairman and Chief Executive Stephen Marks said in a statement. "With the recent improvement in the wholesale order books, the changes we have made are starting to resonate with our customers."
"Although it is early days in our turnaround, the underlying strength of the business and the significant global awareness of the brand, coupled with the changes we are making provide the foundations for continued improvement and give me confidence for the future," he added.
The company sold four stores during the period and plans to close three more by the end of the year.
Numis raised its rating on the stock to Add, from Hold, saying its UK retail initiatives were gaining traction and the company is moving in the right direction even though it has a lot more to do.
Still, the company's shares were down 4.6% at 31.5 pence Monday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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