French Connection shares down 23%

Fashion retailer French Connection Group, which has outlets in Ireland, has reported a half-year loss and said it expected to stay in the red for the full year, sending its shares down as much as 23%.

The British retailer reported a pretax loss of £6.3m (€7.8m) for the six months to July 31, compared with a profit a year earlier, as its core UK market continued to struggle.

“UK has continued to be reasonably difficult,” chief operating officer Neil Williams said.

Like-for-like sales at the company’s UK/Europe retail division, which accounts for half of its revenue, fell 9.5%.

Many British retailers are finding the going tough as consumers cut back spending in the face of inflation, meagre wage increases, employment fears and government austerity measures.

French Connection, whose eponymous high street clothing chain accounts for over 90% of its sales, said it had begun to implement measures to turn around the business.

“We’ve targeted about 15 loss-making stores which we will exit where economically viable,” Williams said.

But Seymour Pierce analyst Freddie George described the company’s review of its retail business as “rather underwhelming”.

“Although it will be a long haul to get the company back on the recovery track, we believe the business does have value. It has a number of brands, including Toast and Great Plains” he said in a research note.

Reuters