Fashion retailer defies weather impact

FASHION RETAILER French Connection said it continues to reduce its losses despite the negative impact of warm autumn weather on sales.

Stephen Marks, chairman and CEO of French Connection

The fashion chain, which has around 120 stores and concession outlets in the UK and Europe, said like-for-like sales fell 5.7 per cent in the 17 weeks to November 22 but that it avoided large-scale discounting as margins improved by 2.4 per cent.

Shares jumped almost 10 per cent after the company said its losses continued to reduce, aided by improvements at its wholesale division and in global licence income. It added that its order book for next spring was strong.

Sign up to our Business newsletter

Sign up to our Business newsletter

Founder Stephen Marks, who is the company’s chairman and chief executive, has closed under-performing stores, grown online business and employed a new design team in a bid to end a long run of losses.

Mr Marks said: “As widely reported trading in UK retail has been tough and while we still have the all-important Christmas period to come, I am pleased to report that the overall performance of the group continued to be positive.”

Cantor Fitzgerald analyst Freddie George continues to expect the company will break even in the year to January and post a profit of £2m the following year.

He added: “The company’s strategy, in our view, now has traction particularly in the UK and Europe. There is more clarity on pricing architecture between the ‘good, better and best’ ranges’ particularly in womenswear.

“The accessories assortment has been strengthened, as there is a better focus on the ‘best sellers’ and there has rightly been a significant reduction in markdown activity.”

Yesterday, Topshop and BHS owner Arcadia said warmer autumn weather had impacted sales, while last month retail giant Next lowered its full-year forecast in the wake of Britain’s Indian summer.

During the period French Connection closed three UK stores.