Today’s 7% drop in the market valuate of French Connection is hardly surprising. As we argued last week, the fashion retailer may have to have something up its sleeve to please its stakeholders.
Results for the six-month period ended 31 July 2015 were released today. Highlights:
- Pre-tax losses came in at £7.9m (2014: -£3.9m) in the wake of a poor performance for Spring 15
- Its gross cash position has fallen to £15m from £23.2m on 31 January
- Cash flow from operations is -£8m
- Revenue were £75.8m, down 9.8% on reduced retail store portfolio and lower LFLs
- Store closure plan continued with 6 non-contributing stores already closed during the period
- UK/Europe retail LFLs came in -10.7% (2014: +6.0%)
- Wholesale revenue were lower by -2.6%, although UK/Europe recorded a +4.7% performance
- Operating expenses down 1.4% than in the prior year
- Growth in licensing stood at 3.4%
- Retail trading over the first six weeks of H2 has been stronger
Chief executive Stephen Marks said: “As anticipated in our April trading update it has been a tough trading period for us and we have responded accordingly to ensure we deliver improvements going forwards.”
“We have already closed 6 stores during the period, with more targeted in the second half.“
There’s not a single mention to its online strategy in its trading update, which is surprising given its poor performance as well as based on the findings of our preliminary SEO audit.
If you want to discuss how French Connection could boost its online performance and you are interested in our premium audit of its website please contact our team at info@hedgingbeta.com
(Alessandro Pasetti and Hedging Beta are not invested in any of the companies mentioned in this article.)