French Connection reduces losses although like-for-like sales fall by 5.7%
French Connection has reported an improved performance in the three months to 31 October with a further reduction in pre-tax losses. The fashion retailer said the improvement was driven by a better performance at its wholesale division and global licence income.
Group wholesale revenue increased by 9% compared to the same period last year and the retailer said its order book for spring 2015 is strong.
However, sales in the UK and Europe suffered in the 17 weeks to 22 November as the retailer traded against stronger prior year comparatives and unseasonably warm weather. During the period, like-for-like sales dropped by 5.7%.
Through a combination of improved underlying margin and a continued focus on full price sales, UK/Europe gross margin improved in the period by 240 basis points. With underlying operating expense savings and the reduction of costs due to the closure of non-contributing stores the losses in the retail division were marginally reduced.
In the UK French Connection closed three non-contributing stores and opened two concessions. In Europe it opened a store in Berlin, took over a franchise store in Amsterdam, and opened two new Spanish concessions in the El Corte Ingles department stores. A new franchise partner also opened a store in Grenoble.
French Connection chairman and chief executive Stephen Marks said: "As widely reported trading in UK retail has been tough and while we still have the all-important Christmas period to come, I am pleased to report that the overall performance of the Group continued to be positive, particularly in UK wholesale and global licensing with continued tight cost control and we expect the results for the full year to be in line with market expectations."
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