Nov 30, 2015
French Connection winter fashions help sales to recover
Nov 30, 2015
French Connection Group Plc said strong sales of its winter fashions on Britain's high streets have put it on track to meet the market's full-year expectations, sending its shares up as much as 25 percent.
In a sign that a protracted turnaround programme is starting to bear fruit, French Connection on Monday reported a 0.2 percent rise in like-for-like retail sales in the UK and Europe for the 16 weeks ended Nov. 21.
This compares with a 6.1 percent drop in the comparable period last year.
"While we still have the all-important Christmas period to come, we expect the results for the full year to be in line with market expectations," Stephen Marks, French Connection's chief executive and founder, said in a statement.
Popular in the 1990s for its FCUK logo, French Connection's appeal has ebbed in a fiercely competitive UK fashion market, prompting the 43-year-old company to embark in 2012 on a major turnaround programme.
On Monday, French Connection said it expected to close seven "non-contributing" stores during the second half of the year, in additions to the dozens already closed as part of the programme.
The company will also vacate its loss-making Regent Street premises in central London at the end of March, receiving 2.4 million pounds in compensation as the entire building is being redeveloped.
French Connection had 394 retail outlets, including franchised and licensed stores, as of July 31.
Numis analysts wrote that they were "encouraged" by the upturn in sales and the accelerated closure of loss-making stores, which they said "should underpin solid progress in full-year 2017."
French Connection said sales of its Winter 15 collection, which includes dark-coloured sheepskin coats, wool capes and quilted jackets, continued to be strong after a "promising start to the season."
The French Connection brand generates nearly 90 percent of revenue for the company, which also owns the wholesale-only Great Plains ladieswear range. Its others brands are Toast and YMC.
French Connection's shares were up 22 percent at 37 pence at 1100 GMT, on track for their biggest one-day gain since February 2011. The stock was also the biggest gainer on the London Stock Exchange.
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