High street fashion chain French Connection has laid bare the harsh impact the Covid-19 lockdown had on the already-struggling company.
Bosses revealed sales in the six months to July 31 plunged 53% to just £23.9 million – compared with £51 million a year earlier – with pre-tax losses extended from £4.6 million to £13.2 million.
The chain said it was confident in its survival and believed the £15 million lifeline secured by restructuring specialists Hilco would be enough to see it through the pandemic restrictions with a “reasonable expectation to continue in operational existence for the foreseeable future”.
Founder Stephen Marks, who also sits as chairman and chief executive, said: “This has undoubtedly been the most difficult trading period that the group has ever faced and I would like to thank our staff, both those who have kept the business running and those who have been on furlough, for their ongoing commitment to French Connection.
“Despite the unprecedented difficulties we continue to face alongside the rest of the high street, having been able to secure the necessary financing we feel that we are well-positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise, especially given the good performance of wholesale, while maintaining a very tight control of costs.
“Given the overall continued uncertainty about how trade will be over the next few months, and particularly with the biggest trading period of the year still to come, it is imperative that we focus our attention on cost control and preserving cash.”
All French Connection stores were closed from March 23 until June 15 and, although bosses saw a slight uptick in online sales of 8.2%, it was not enough to offset the losses.
Wholesale revenues – sales to department stores and online retailers – fell 49.3% to £13.8 million, and store sales dropped 57.6% to £10.1 million, although this was also due to the permanent closure of nine retail sites.
Since stores reopened, sales have built gradually, the company said, although customer numbers remain low amid recent Covid restrictions, despite shops remaining open.
French Connection has struggled for several years to keep its place on the high street as bosses failed to keep up with the changing face of the market.
Bosses said the company has £5.2 million cash in the bank – down from £10 million a year ago – although there was optimism that its partnership with sofa seller DFS was positive.