French Connection: Sale talks ‘ongoing’ as losses narrow
French Connection has said that sale talks are ongoing, as the embattled fashion chain posted narrowing losses and a fall in revenue this morning.
Shares fell 12.37 per cent after the retailer announced it is extending a strategic review into the business amid continued discussions over the future of the struggling business, which has been loss-making for the last six years.
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In a half-year update this morning the firm reported that pre-tax losses for the six months to the end of July were £4.7m, improving from a loss of £15.1m in the same period a year ago.
Revenues slumped 12 per cent to £51m, with the company blaming store closures and a shift in timing of wholesale shipments.
“We initially expected this strategic review (including the formal sale process) to conclude during the first half of 2019, but as announced on 28 June, given the active ongoing discussions, we extended this process to now,” the firm said in a statement this morning.
“Discussions are still ongoing with a number of parties.”
Shares in the group have slumped 20 per cent during the last 12 months, with the firm facing pressure from investors in recent years over the control of chairman and chief executive Stephen Marks.
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“I am pleased that the changes we have made to the business over the last few years continue to move us forward,” Marks said today.
Marks added: “There is no doubt that progress has not been helped by the trading conditions in which we operate in the UK, although our retail performance has been resilient, overall the wholesale business is strong and we continue to see good stability in the licence income.”
In a statement today the firm said: “Alongside several potential strategic options, the review includes the consideration of all types of corporate and brand transactions, including seeking offers for the group.
“As disclosed at the time, we had commenced preliminary discussions with several interested parties and we have had conversations with several other interested parties regarding the group’s plans.”