French Connection profits cut after store closures

British fashion retailer French Connection Group reported a drop in profit for the half-year due to the closure of some of its stores.

French Connection profits cut after store closures

The owner of the Toast, French Connection and Great Plains brands has been struggling to fend off competition from fast-fashion rivals such as Asos, Forever 21 and Inditex’s Zara. It has closed stores and hired new management and design teams as it tries to return to a profit.

In March activist investor Gatemore Capital urged the loss-making company to split itself or spin off its Toast brand, among other options. It offloaded its entire stake in July, saying it was not satisfied with the pace of change at the 45-year old retailer.

British billionaire Mike Ashley’s Sports Direct took an 11.2% stake in French Connection in February, becoming its second-largest shareholder. Sports Direct’s intentions were not clear.

French Connection said gross profit for the six months to July 31 fell to £31.1m (€35.5m) from £38.1m a year ago. Revenue came in at £68.1m, down from £69.2m a year ago.

French Connection, which has more than 409 outlets, said it closed seven stores over the last 12 months, reducing its trading space by 10.2%. Sales at stores open for more than a year in the UK and Europe were “broadly flat”, it said.

However, revenue at its wholesale operation rose 7.2% to £29.6m, with the business returning to growth in the UK, Europe and North America. French Connection posted its fifth annual loss in a row in March.

Reuters

More in this section

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up
Home Delivery
logo-ie

HOME DELIVERY SERVICE

Have the Irish Examiner delivered to your door. No delivery charge. Just pay the cover price.