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2 Oct 2009 18:35
FRENCH CONNECTION GROUP PLC
French Connection Japan
02 October 2009
As a part of the previously announced strategic review of our businesses, French Connection is today announcing its intention to close all of its 21 stores in Japan over the next six to nine months. At the same time the Board is searching for an appropriate licensee to operate the brand in the Japan market.
On an on-going basis the Japan business was forecast to generate a loss of £2.5 million in the year to 31 January 2010, having incurred a loss of £1.7 million in the six months to 31 July 2009. The business will trade as usual until the end of the calendar year and thereafter will operate with a focus of clearing any excess inventory.
It is expected that after the recovery of significant lease deposits, the cash cost of the closure will be less than £0.5 million, excluding the trading result up to closure. There will be one-off charges to the profit and loss account in the year to 31 January 2010 amounting to approximately £2.5 million relating to closure costs and asset write-downs.
Stephen Marks, Chairman and Chief Executive, said "I believe Japan continues to be an important market and presents a good opportunity for French Connection in the future. We will be maintaining brand presence in the market through our e-commerce offer, however in light of our strategic review and our aim of improving both profitability and cash generation for the Group in the short term, we feel that the most effective way of operating retail stores in this market is through a licence partner."
Enquiries:
Neil Williams/Roy Naismith French Connection +44(0)20 7036 7063
Tom Buchanan/Deborah Spencer Brunswick +44(0)20 7404 5959
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