French Connection is “on track” to achieve profitability by the end of the year, according to founder, chairman and chief executive Stephen Marks.

The retailer reduced its underlying operating pre-tax losses to £5.4m during the six months to July 31, 2018, down £0.4m from the same period last year.

Like-for-likes dropped 7% and group revenues also fell during the period, down 2.4% to £58.1m.

Wholesale revenue was a rare bright spot with sales up 6.2%, or 8.9% at constant currency. The higher wholesale mix dragged gross margin down from 42.9% to 41.5%.

French Connection closed two unprofitable stores and benefited from the sale of Toast, boosted by proceeds from the £11.7m sales, although this lift was offset by “onerous” retail leases.

The retailer has struggled for years to return to relevancy and win back consumers following its 1990s heyday. Following pressure from activist investors, the business has brought in greater non-executive influence and closed loss-making stores.

Marks said: “I am pleased that the changes we have made around the business over the last couple of years continue to move us forward.

“There is no doubt that progress has not been helped by the trading conditions in which we operate in the UK, although we can take great confidence from the performance of the wholesale business and the stability of the licence income.”

He added: “We remain on target to return the business to profitability this year and we will be doing everything we can to ensure that happens.”