As Fashion Week injects a bit of glamour into London’s drab September weather, things are looking up for one of the UK’s best-known fashion brands.
French Connection posted results today showing a pre-tax loss of £6.1m in the six months to the end of July, down from £6.3m during the same period last year. It added that it had cut losses in its UK and European business by £1m. Not bad.
It’s been a troubling few years for the retailer – and although there are signs of a recovery, it’s by no means out of the hot water yet. Revenues across the business fell by 6.4% to £89.9m, reflecting a ‘softening in our wholesale business and a reduction in the UK and Europe business’.
And like-for-like sales across the UK and Europe dropped by 4.5%, which it attributed to pushing back the start of its summer sale.
According to chief executive Stephen Marks, consumer reaction to the brand’s autumn/winter collection has been ‘encouraging’ – but its recovery is shakier than a catwalk model in a pair of this season’s five-inch spike-heeled ‘Sasha’ boots.
‘It is early days in our turnaround,’ admitted Marks.
‘[But] the underlying strength of the business and the significant global awareness of the brand, coupled with the changes we are making, provide the foundations for continued improvement and give me confidence for the future.
The good news is that conditions for French Connection’s recovery are good: last month figures by the Office for National Statistics showed year-on-year retail sales were up 1.1%, with estimated weekly spend hitting £1bn.
The challenge for retailers is now to lure customers into stores without the added enticement of sales. This summer, a PwC report showed three-quarters of shops on the high street were running sales. If retailers can shift their stock without discounting, that’s a sign of a true recovery. Credit cards at the ready: let the spending spree commence…