Coronavirus: French Connection seeks urgent funding in battle for survival

The beleaguered fashion retailer and brand warned that without a fresh injection of capital its “cash resources will eventually be eroded in the coming months” should current trading levels continue.

However, French Connection said it was “confident” of raising the funds that would see it through the pandemic.

It added that talks with potential investors were “proceeding well” and insisted the business was “making good progress on due diligence and agreeing terms”.

French Connection has had to seek outside investment after being unable to access government funding schemes.

Although it is benefiting from business rates relief and the job retention scheme, the retailer said it has “proved very challenging” to access government loans as a result of “the tight qualification constraints that have been imposed” on the schemes.

French Connection’s cash crunch comes amid a slump in sales following store closures across its markets.

The business has continued to trade online in the UK and USA, and said it enjoyed a 44% spike in ecommerce sales during the past six weeks. It is also supplying “a few” of its wholesale partners that are trading digitally.

But French Connection said this only “makes up a small proportion” of its overall business.

It said it was “starting to see a small increase in activity” in its European markets as lockdown measures are eased – and it is preparing for similar measures to be implemented in the UK from June 1.

French Connection has been “developing plans” so that its shops could open safely and added that it would do so “in an orderly manner”.

However, the retailer warned that it did not expect “more normal levels of trade” to return “for some time to come”.