French Connection reveals £10.5m loss
French Connection was founded by Stephen Marks in 1972 but endured a torrid 2012
French Connection has slumped to a £10.5m loss after suffering “very difficult” trading particularly at Christmas.
Stephen Marks, the fashion chain’s chairman and chief executive, hoped the company would return to profit by 2015 having lost £1m in the festive season alone. Marks said customers’ perception of French Connection, which was well known for its FCUK brand, was “not too bad”.
The £10.5m loss in the year to the end of January compares to a £5m profit a year earlier. Sales dropped from £215.4m to £197.3m.
Marks, who owns 42% of the company’s shares, said the chain’s UK stores were the worst performing, and UK sales dropped 7%. To spark a turnaround, Marks “changed the design team” and “changed the staff in the shops” because “they weren’t performing”, he added.
The company has been trying to offload 15 of its underperforming UK stores, but has so far only been able to lose three so far due to difficulty negotiating with landlords. Closing the stores cost the chain £1.3m. French Connection said it was in the process of closing one more store and six concessions and expects to close another two stores in the year.
Marks said the company’s Toast and YMC brands were trading “very well” and that YMC was a “very niche part of the marketplace, [but] expanding slowly but surely”.
French Connection shares, which have lost 46% of their value over the past year, closed up 10.5% to 27p. The shares peaked at £4.87 in 2004.