Losses at French Connection doubled in the first half after shoppers left the fashion retailer’s spring collection on the shelves.
Shares in the fashion chain tumbled 2.5p, or 9 per cent, to 25.5p as it reported a 9.8 per cent fall in sales to £75.8m for the six months to 31 July. Its pre-tax losses widened to £7.9m from £3.9m a year ago.
The group said the fall was due to the “disappointing performance” of its spring 2015 collection, which it had warned about in April.
Stephen Marks, French Connection’s founder and executive chairman, said: “It has been a tough trading period for us and we have responded accordingly to ensure we deliver improvements going forward. We have already closed six stores during the period, with more targeted in the second half.”
However, he was more upbeat looking forward as French Connection said its second-half trading so far had been stronger, especially of its winter 2015 collection. Full-price sales for the past six weeks, on a like-for-like basis, are up 6 per cent on 2014.
“The continued growth of licensing, solid spring 2016 forward orders, and tight control of costs, are positive signs,” Mr Marks added.
But he cautioned: “Trading, however, is unpredictable, and we are as ever dependent on the Christmas selling period.”
Analysts at Cantor Fitzgerald warned that French Connection was unlikely to break even until 2018 and predicted the retailer would make a £4.5m loss this year, up from earlier estimates of £3.5m.
But they added: “The company has a well-established retail and wholesale network, successfully selling in over 50 countries and four continents and has four brands, which each have value.”
Andrew Wade, an analyst at Numis, said: “We look for French Connection to resume its journey towards break-even and beyond, a journey which had been progressing solidly over the last two years.
“Although we see substantial brand value, we are neutral for now, awaiting sustained evidence of improved execution.”
The company, which was founded in 1972 by Mr Marks, is also having to look for a new group finance director after it emerged in July that Adam Castleton will be leaving to join LSL Property Services.
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