French Connection makes a loss after difficult year

Clothing retailer French Connection revealed an underlying loss for the year and revenue fell, in line with expectations, as the group battles against difficult and competitive markets.

The group reported an underlying loss before tax of £7.2m for the year ended January 31st 2013 compared to a profit of £4.6m the same time a year earlier.

Revenue for the year fell 8% to £197.3m.

The underlying loss is adjusted to exclude the costs of disposal and closure of retail stores amounting to £1.3m and the impairment of goodwill of £2.0m.

French Connection said it has made progress in implementing initiatives to boost sales growth.

Commenting on the results, Chairman and Chief Executive Stephen Marks said: "After a difficult trading year, I am pleased that many of the initiatives we have taken in order to provide a new impetus to sales growth are beginning to show interesting results. While it is still early days, we see some good progress, and I am pleased there is some momentum in the business."

"The significant changes we have already and will continue to make will help us to improve our financial performance in this most difficult and competitive of markets."

The group added that it is managing the business tightly in order to increase full-price sales volumes, limit discounting, manage inventory levels, control cash and build confidence with its customers.

The retailer reported closing net cash of £28.5m compared to £34.2m a year earlier with no debt.

"With the help of the broad range of improvements in our business, a strong balance sheet and our global brand strength, we will return the business to profitability," the group added.

CJ