Troubled fashion retailer French Connection has shrunk its losses on the back of lease negotiations and store closures, and extended “ongoing” talks over its future.
The loss-making retailer closed seven stores and two outlets during the six months ending 31 July, and opened one new store in central London.
French Connection said it renegotiated “several leases” to reduce overall rent for continuing stores.
Across its operations, the retailer made an operating loss of £3.7m including both onerous lease provisions and IFRS 16.
Within its retail business, the retailer made an underlying loss of £6.7m, excluding these exceptions. The gap has narrowed compared with the previous year’s decline of £7.2m, partly driven by store closures.
Pre-tax losses for the half year improved to £4.7m, from a loss of £15.5m during the same period in 2018.
However, revenue in the first half of the year dropped by 12.2% to £51m, with the store portfolio reduction and “shift in timing” of wholesale shipments cited as the main causes.
The retailer said it is extending a strategic review into the business, which it previously expected to conclude during this financial period.
The company stated: “We initially expected this strategic review (including the formal sale process) to conclude during the first half of 2019, but as announced on 28 June, given the active ongoing discussions, we extended this process to now.
“We believe that further time is required to bring the process to a successful conclusion and expect the process to be concluded by the end of our current financial year.”
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