French Connection sees signs of turnaround

The group reported a slender half-year profit from the businesses it intends to retain and said it was confident of progress over the year as a whole.

As part of moves to slim down the group, French Connection is shutting loss-making stores in the US alongside the closure of its Japanese business and some European retail outlets. It has also sold its loss-making Nicole Farhi brand.

The retained businesses increased turnover by 4% to 96.2m in the six months to July, while overheads were reduced further to generate pre-tax profits of 200,000, compared with losses of 5.4m a year earlier.

Mr Marks, who is company chairman, told shareholders: "I am pleased with the substantial improvement in operating results in the first half of the year and I am confident that French Connection is now back on track."

With the restructuring now largely complete, he said the company was at the beginning of a new period of growth.

The shake-up has left French Connection with its UK and European retail and wholesale operations, the Great Plains wholesale-only ladieswear range and Toast, its mail order fashion and homewares brand.

It is also planning to keep 20 stores in North America and today announced a licence agreement for the use of the "UK Style by French Connection" name in the US by a Hong Kong-based consumer goods export firm. The products will be sold exclusively through Sears department stores.