French Connection has reported narrowing losses in the first half of the year.
In the six months ending July 31, the British retailer’s underlying loss came in at 0.9 million pounds, compared to a loss of 3.6 million pounds in 2019, prior to the outbreak of the pandemic.
The company cited the closure of non-contributing stores, a bounce back of wholesale volumes and a tight focus on overheads.
Meanwhile, group revenue came in at 40.2 million pounds, a 21.2 percent drop compared to 2019, due to a reduced retail portfolio and temporary Covid-19 store closures, which were partly offset by an increased wholesale and e-commerce contribution.
French Connection’s composite gross margin dropped to 31.6 percent compared to 42.7 percent two years ago, due to the mix shift towards lower margin wholesale channel and the level of fixed product development and logistic costs on the lower overall volumes.
Signs of recovery at French Connection
Chairman and chief executive Stephen Marks said he was “pleased that the improvement in business we saw in the early part of the period has continued throughout the first half of the financial year”.
He said wholesale in the UK and US performed well, “with a good outcome to the Summer season”.
Earlier this month, French Connection announced it had accepted a buyout offer from a consortium of bidders including its second-largest shareholder, Apinder Singh Ghura, in a deal valuing the company at 29 million pounds.
CEO Marks, who remains the biggest shareholder with a stake of 41.5 percent, revealed at the time he plans to retire from the company when the transaction closes.
The high street retailer was highly popular in the 90s and early 00s but has struggled in recent years to compete with online competition.
“Over the last five years, French Connection has made significant progress in its plans to rationalise the size of its store portfolio and to return the group to profitability,” Marks said on Tuesday.