French Connection has reported a steep drop in revenue for the full-year due to store closures, but remained upbeat on its recovery with strong sales reported in the UK and US since stores reopened.
For the year ended January 31 2021, group revenue fell 40.4 percent to 71.5 million pounds, compared to 119.9 million pounds a year earlier.
Wholesale revenue dropped 33.1 percent to 49 million pounds, with the retailer’s customers particularly hard hit during the first national lockdown. However, “UK online customers performed strongly in the second half”, the company said.
Meanwhile, retail revenue fell 51.8 percent to 22.5 million pounds. Online sales in the year were up 7.1 percent, driven by homeware and casual clothing.
Underlying loss for the year was 11.7 million pounds compared to 2.9 million pounds a year earlier, driven by “significant decline in sales, additional one-off stock provisions, offset by cost reductions across all areas”.
French Connection losses widen
The retailer closed the year with net debt of 1.3 million pounds compared to net funds of 8.1 million pounds in 2020.
CEO and chairman Stephen Marks acknowledged the “difficult challenges” posed by Covid-19 throughout the year. “Initially we worked with our key stakeholders to stabilise the business and secure new financing. Trading had been broadly in line with our expectations at the time of the financing but we were then hit by the second and third national lockdowns in the UK,” he said in a release.
But Marks remained positive on the company’s recovery. “Given the new financing, together with the actions being taken to optimise sales, tightly manage costs and preserve cash, we are confident that the group is well positioned to navigate any further of uncertain consumer demand,” he said.
Marks also said the retailer’s wholesale business in both the UK and US had bounced back for the summer and winter seasons, and said e-commerce sales are growing with the summer collection selling “very well”.
He said: “With stores having predominantly re-opened in the UK, we are seeing a much better sales performance than we experienced at the end of the first national lockdown although it will take time to see how quickly things develop over the coming months, in our own stores but also for our wholesale customers. Overall though I feel that we are definitely moving in the right direction once again.”