French Connection seeks new funding
Fashion retailer French Connection has warned that it could run out of cash in the next few months if it is unable to secure new funding or if sales do not pick up.
In statement, the company said it had accessed the government’s covid-19 pandemic job retention scheme and had obtained rates relief for its stores but had been unable to secure any other government funds due to tight qualification constraints.
The company is now in “active discussions” with several potential funding partners and said it remains confident that it will raise sufficient funds to support the business until trading improves. However, it added: “Without securing additional funding and should the current covid impacted trading levels continue, the company’s cash resources will eventually be eroded in the coming months.”
Following the closure of its UK stores in March due to the pandemic, French Connection has increased its online sales in the UK and US by 44% in the last six weeks. The company has also continued to supply a few online wholesale customers who are still trading throughout the crisis.
In addition, it is working to conserve cash and reduce costs while it develops plans for the re-opening its stores once lockdown restrictions are eased.
The company said: “We are planning to open up in an orderly manner to ensure everything required is in place. We look forward to returning to more normal levels of trade as the situation evolves, although we do not expect this for some time to come.”
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