French Connection reports £3.6m loss

12-09-2006

Fashion retailer French Connection has reported a first-half loss of £3.6 million after being forced to try and attract shoppers by cutting prices on its clothing lines, which it admitted had "not met" customer expectations in the past.

The pre-tax loss, reported by the high street chain for the six months to July 31st, compares with a profit of £5.1 million for the same period last year.

Turnover at the firm, which has slashed profit forecasts four times in the past two years, fell six per cent to £111.2 million, compared to £117.9 million a year earlier.

The retailer, known for its controversial advertising campaigns, has faced declining sales amid the challenging retail environment in the UK and Europe and the waning popularity of its clothing ranges.

Commenting on the company's disappointing first-half performance, French Connection chairman Stephen Marks said: "The challenges we faced during the last financial year have continued to impact trading in the new year."

"It has taken longer than we had hoped to translate the changes we have made in our business into sales growth," he admitted.

But despite the first-half loss reported by the retailer, French Connection said that it was confident that the "strong initial reaction" to its new winter collections indicated that the company's efforts to boost its performance were beginning to have an impact.

The company said that in the past three weeks, like-for-like sales across its stores were up by nine per cent and that it expected a total rise of three per cent in sales levels over the second half of 2006.

"We will keep on working to improve our ranges and all operational aspects of our business," added Mr Marks.

"The indications are that we were beginning to achieve our goals, with sales in the early part of the new season encouragingly ahead of last year."


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