French Connection has swung to a loss after a worse-than-expected year and says the chances of trading improving in the UK in the foreseeable future are unlikely.
The fashion retailer reported an underlying loss of £2.9m for the year ending January 31, 2020, down from a profit of £0.8m the previous year.
Group revenues plummeted 11.4% to £119.9m due to store closures and what the retailer called “the difficult retail trading environment in the UK”.
Wholesale revenue in the UK also slipped 4.8%, however, the retailer was keen to emphasise the success of its North American wholesale arm, which saw sales jump 15.7%.
The retailer reported a 2.5% decline in like-for-like sales, with the situation being particularly bad in the second half of the year.
During the period, French Connection closed 11 “non-contributing” stores and three outlet locations.
It also closed its China and Hong Kong joint venture at a loss of £0.5m.
Chief executive Stephen Marks said the end of last year had been very disappointing for French Connection and warned that with coronavirus affecting trading the situation was unlikely to improve any time soon.
“The performance this year has not been as anticipated and we are not being assisted by the continued difficult trading conditions in the UK and potential uncertainty due to the Covid-19 coronavirus.
“We believe the trading landscape in the UK is unlikely to improve in the short term and this has a potential impact on both the retail and wholesale businesses.
“Against this background we are working hard to ensure we are operating as efficiently and cost effectively as possible while working closely with all our trading partners to maximise business with them.”
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