French Connection has revealed interim losses which forced it to close its Northern European retail division and make staff cuts to bolster profitability.
The firm cut 50 staff from it London headquarters and closed stores in Denmark and Sweden.
The fashion retailer reported a pre-tax loss of £12.8 million on a 4% growth in revenue - £116.9 million for the six months to the end of July.
Like-for-like sales rose 2% in the retailer’s UK/Europe retail division, which accounts for more than half of turnover, but the gross profit margin fell to 50.8% from 51.8% year on year. The retailer said the weakness of sterling was mainly to blame.
Retail sales at the North American arm, which accounted for 16% of turnover, fell by 3% with margins 6.5 percentage points down due to increased promotions.
French Connection added that wholesale orders in both areas had fallen.
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