Fashion group French Connection has secured funding from investment and turnaround specialist Hilco, which will help it through the disruption caused by the coronavirus pandemic.
French Connection, which said it had been ineligible for government-backed financing schemes during the crisis, has agreed a £15m working capital facility with Hilco Capital for the next two years, which it expects “will be sufficient to cover the company’s cash requirements, based on its current conservative expectations of future trade”.
Since stores were allowed to reopen in mid-June, French Connection said “as expected, given significantly reduced footfall, initial sales have been low” though conversion has been up.
The retailer said: “We are seeing sales volumes grow week on week, as further relaxation of the lockdown continues, however, we anticipate this to be a gradual process, especially in larger cities.”
Sales through the retailer’s own websites in the UK and USA have delivered a sales rise of 24% over the last 15 weeks.
The retailer affirmed confidence in the future following the financing arrangements.
French Connection said: “Although the stores have reopened, it is too early to predict how quickly and to what extent store footfall and therefore sales will recover. This will also impact the rate of improvement within the wholesale channel.
“Given the company’s new liquidity, together with the actions being taken to optimise sales, tightly manage costs and preserve cash, the board is confident that the company is well-positioned to navigate an extended period of uncertain consumer demand.”
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