Sign In
21 May 2008 11:15
FRENCH CONNECTION GROUP PLC
Interim Management Statement
21 May 2008
French Connection Group plc is today publishing its Interim Management Statement covering the period from 1 February to 17 May 2008.
As widely reported, the retail fashion markets in both the UK and US have been particularly difficult during the first weeks of the new financial year. However, the Board believes that the French Connection brand has performed well during this period, reflecting the improvements made in the business during the past year.
In the 15 weeks since the beginning of the financial year, sales in the UK/Europe retail division have been broadly flat, both in total and on a like-for-like basis. In the context of a difficult market, we feel this is a good performance and in particular French Connection ladies' wear and Toast have performed well, showing good growth over last year. The achieved margin for the UK/Europe retail business for this period was at a similar level to last year.
In our wholesale business in UK/Europe, orders have reflected the difficult retail trading environment and so year-on-year growth in deliveries of our Spring/Summer 2008 products in the year to date has been limited. Orders for the Autumn/Winter 2008 season are broadly in-line with last year at the same time but the final outcome for the season will be determined by the level of in-season ordering.
In our North America retail business like-for-like sales were broadly flat on last year, but margin has deteriorated due to additional promotional discounting. Overall retail sales volumes are down 9% following the closure of three stores last year representing a reduction of 10% in the total space traded.
Sales to date in our North America wholesale business are well ahead of last year, reflecting strong forward orders for Spring/Summer 2008. Forward orders for Autumn/Winter 2008 so far are maintaining the high levels achieved last year.
Other divisions in the business are trading in-line with expectations.
Our balance sheet remains strong with £30.9 million of net cash at the end of April 2008 (2007: £33.5 million). 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 2008.
Looking forward, the challenging economic conditions which are affecting the retail markets in both the UK and the US appear to be continuing and in particular affecting men's wear. We therefore maintain our cautious outlook for the rest of the year, despite the encouraging performance of the French Connection ladies' wear ranges.
Enquiries:
Neil Williams/Roy Naismith French Connection +44(0)20 7036 7063
Tom Buchanan/Deborah Spencer Brunswick +44(0)20 7404 5959
Follow the stocks
