Another year of profit losses for French Connection
High street fashion shop, French Connection, has reported yet another year of losses.
The figures
French Connection said revenues for 2016 were £153.2m, down six per cent, compared to last year’s £164.2m.
The company declared an underlying operating loss of £3.7m this year, compared to £4.7m last year.
It has less cash this year and reported a closing position of £13.5m, down by £0.5m.
Overall retail revenue is down 4.9 per cent to £87.9m on an average space reduction of 11.7 per cent and wholesale revenue is also down 9.1 per cent to £65.3m.
Two stores have already closed after the year end and an additional six stores are earmarked for closure this year.
Share price
French Connection chief, Steve Marks, is clinging on to both chief executive officer and chairman roles for now
Why it’s interesting
The retailer has submitted another year of poor results and is in the midst of a boardroom battle with activist investor, Gatemore Capital Management, which is calling for a break up of the company, replacement of two non-executive directors and wants to stop Steve Marks from being both CEO and chairman at the same time.
Last month, Sports Direct’s chief, Mike Ashley, took an 11 per cent stake in French Connection and this means he will have a say on any takeover bids in the future if one were to arise.
What the company said
Stephen Marks, chairman and chief executive, said: “We have seen an improvement in performance over the financial year with continued good progress in the UK and Europe retail business, but as previously reported, this has been partly held back by the wholesale and licensing divisions, particularly in the first half of the year.”
In short
French Connection remains a loss making outfit in the midst of a boardroom battle.