Fashion retailer French Connection has reported a loss in what its chairman described as a disappointing year end results. The British company did report though that its investments in e-commerce are seeing a return and increasing usage.
French Connection reported a pre-tax loss of £17.4 million for the year ending 31 January 2009. For the same period a year before the fashion house reported profits of over £3m. This is the first time in 10 years that French Connection has reported a loss and it decided not to pay its dividend payment to shareholders. The UK and European retail arm of French Connection reported an increase in sales of eight per cent, creating a total revenue of £125.3m.
Chairman of the company Stephen Marks said of the results, "The results for last year are disappointing and, to a large extent, are a reflection of the impact on fashion markets of the down-turn in the major world economies and in particular the US market."
Over the last year French Connection has invested in its e-commerce offering by recruiting a new management team who set about redesigning the online shop. French Connection failed to provide any numbers on the increasing online sales but said in a management statement, "our web sales represent a significant and growing income stream, both through our own website and through our supply of products to third parties."
Marks said he and his management team were now seeking increased efficiencies, "we are working to address the significant challenges caused by the market conditions through reducing costs and improving efficiency. These changes will help to mitigate the impact on the business of any further decline in the market." A cost-cutting programme has already been instigated and it is "preparing for a difficult new financial year", the company said. Areas of focus include the supply chain.