1st Jul 2005 07:00
French Connection Group PLC01 July 2005 1st July 2005 French Connection Group plc Trading update As widely reported, the retail environment in the UK continues to be verydifficult. At our AGM in May we commented that our improved ranges were having apositive impact on our trading but that the level of sales achieved had beenbelow what we had hoped. There has been no significant change in our tradingsince then and we now expect that for the first half of our financial year wewill report a like-for-like sales decline of around 11% in our UK/Europe retailbusiness. We now expect the difficult trading conditions to continue and have reassessedour expectations for the second half of the year. Based on the broad improvementin our ranges we continue to expect an improvement in our UK/Europe retail salesperformance over the level achieved last year, however we are now budgeting onlya small like-for-like increase in sales. The UK retail trading environment is also affecting our wholesale customers andthis has resulted in a very low level of repeat orders for Summer product whichhas had a significant impact on our sales for the first half of the year todate. Although the response to our Winter 2005 collections has been positive,our customers remain cautious given the current trading conditions. We havetherefore lowered our expectations for sales of the Winter 2005 ranges, much ofwhich are delivered in June and July, and now expect to see a 10% decline in thelevel of Winter sales compared to last year. In our North America retail business, sales of the Summer ranges have not beenas strong as we had hoped, but the wholesale business continues to expand well.Overall we continue to be hopeful of an improvement in the profitability of thisbusiness. While we believe that there is potential for an improvement in trading in theAutumn from our stronger ranges, based on our current assessments we now expectthat profit before tax and amortisation of goodwill for the year ending 31January 2006 will be in the region of £20 million - £25 million. Commenting on trading, Stephen Marks, Chairman of French Connection said "TheCBI announced yesterday that the high street has witnessed the sharpest fall insales volumes in more than 22 years. French Connection is not immune to this. Weare encouraged by our strong collections, but the high street is very tough atthe moment." Enquiries: Tom Buchanan/Lucie Anne Brailsford Brunswick +44(0)20 7404 5959 A conference call for analysts and investors will be held at 08.00 UK time. Note:The Company will make a statement regarding the impact of the change toInternational Financial Reporting Standards in early August. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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