French Connection secures funding from Hilco
Fashion retailer French Connection has said in-store sales have been impacted by low footfall since they reopened after the Covid-19 lockdown as it also reported that it has secured funding from Hilco.
However, sales volumes have been improving week-on-week although the company expects this to be a gradual process especially in its larger city shops. In addition, its websites in the UK and US have remained operational during the countries’ respective lockdowns which led to online sales rising by 24% in the last 15 weeks. The company has also continued to supply a number of online wholesale customers in the period.
French Connection said it has been working to reduce costs and conserve cash throughout the pandemic although it has been unable to access any government backed financing schemes due to the qualifying requirements. As a result, the company has now put in place a £15 million working capital facility with Hilco Capital for the next two years which it expects will be sufficient to cover its cash requirements based on current expectations of future trade.
Looking ahead, the company said it will continue with its tight management of costs over the coming months as it waits to see how quickly consumer demand will recover. It added: “Given the company’s new liquidity, together with the actions being taken to optimise sales, tightly manage costs and preserve cash, the board is confident that the company is well positioned to navigate an extended period of uncertain consumer demand, however due to the ongoing uncertainty it does not feel it is appropriate to provide profit guidance at this point.”
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