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20 May 2009 10:55
FRENCH CONNECTION GROUP PLC
Interim Management Statement
20 May 2009
French Connection Group plc is announcing its Interim Management Statement covering the period from 1 February to 16 May 2009.
During this period trading in our businesses has been in line with that which we saw in the last financial year; French Connection ladies' wear continues to show growth over last year and Toast is performing very well. Men's wear continues to be difficult. Markets in North America remain soft and our markets in Asia have experienced a slow-down in retail sales.
Sales in the UK/Europe retail division (accounting for 52% of Group turnover) were ahead by 8% in total and 2% on a like-for-like basis. In the context of the general fashion retail market, this is a good performance with both French Connection ladies' wear and Toast performing very well. The gross margin achieved in the UK/Europe core high street and mall retail business for this period was at a similar level to last year, although with additional outlet stores within the mix, the blended margin is lower.
In our North America retail business (accounting for 16% of Group turnover), sales volumes are down 6% including the effect of a 3% reduction in space traded. Like-for-like sales have shown a decline of 2% and there has been some margin erosion due to additional promotional activity during the winter sale.
Order levels for our wholesale businesses in both UK/Europe and North America (accounting for 15% and 8% of Group turnover respectively) have reflected the difficult retail trading environment in both regions. Deliveries of our Spring/Summer 2009 products have been lower than last year and forward orders for the Autumn/Winter 2009 season are also below last year's levels.
Our Hong Kong and Japan businesses ("Rest of the World") have shown a softening in sales performance reflecting a general deterioration in those markets.
Our balance sheet remains strong with £20.0 million of net cash at the end of April 2009 (April 2008: £30.9 million). The reduction in cash levels reflects the £9.6 million utilisation of cash already reported in the year to 31 January 2009. There have been no other significant changes in the position of the company over the period since the publication of the report and accounts for the year ended 31 January 2009.
Looking forward, we are working to capitalise on the strength of our ladies' wear ranges and to improve the performance of men's wear in all of our markets. We continue to work to reduce our cost base and improve efficiencies wherever possible.
Other than as detailed above in this Interim Management Statement, there have been no material events or transactions in the period from 1 February 2009 to 20 May 2009.
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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