French Connection struggles to close worst-performing UK stores
Monday 16 September 2013
The under-pressure fashion retailer French Connection says it is struggling to close its worst performing UK stores due to tough negotiations with landlords.
Only four stores, out of 15 potential sites, were closed in the six months to the end of July with another three in the pipeline.
The difficulties come as the company saw sales in the period fall more than 6 per cent to £89.9 million, although pre-tax losses improved marginally from £6.3 million to £6.1 million.
French Connection has struggled in recent years, issuing three profit warnings in the past two years; however, bosses hope a new management team will help turn around its fortunes.
The retail division saw revenues fall - the sales period became shorter, in the hope that more shoppers would pay full price. Retail analyst Nick Bubb disagreed: "When your prices are as high as French Connection's, it is hard to get customers to pay full price."
The UK and Europe market, which accounts for 70 per cent of the business, suffered hardest.Wholesale sales fell to £18.1 million from £16.3 million and retail sales dropped to £46.5 million from £49 million; in the UK the company said trading conditions remain "particularly volatile".
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