Published: Tue, March 13, 2018
Business | By Tara Barton

French Connection rallies as full-year loss narrows

French Connection rallies as full-year loss narrows

The company reported a 0.8 per cent increase in like-for-like sales at its stores in the United Kingdom and Europe, and said the retail market place in the United Kingdom continued to be "particularly challenging".

Shares in French Connection have soared more than 13pc after the struggling fashion chain's losses narrowed a year ago and it revealed an unsolicited takeover approach.

Elsewhere, HemoGenyx Pharmaceuticals PLC (LON:HEMO) was the market's biggest gainer, with the AIM-listed shares leaping 24.4% to 3.82p as the group said it has entered into a collaboration with a major USA biotechnology company in a deal worth up to approximately US$250,000.

"While it is clear that the retail market in which we are operating in the United Kingdom is unlikely to improve in the near future, we have clear visibility on the benefits we will obtain from the ongoing portfolio rationalisation", Chief Executive Officer Stephen Marks said.

An 8.6pc surge in wholesale revenues helped boost overall group sales, up 0.5pc to £154m.

French Connection has for some time been closing stores in an attempt to stave off broader market pressures.

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The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website . M&T National Bank & Trust has invested 0.21% in UnitedHealth Group Incorporated (NYSE:UNH). (NYSE:BERY) for 184,485 shares.

French Connection closed 11 stores and concessions over the last financial year and said it would continue to axe unprofitable sites, with an ultimate aim to have around 30 full-price stores by the end of next January.

Meanwhile, the business has been getting back on its feet, though today's results now mark the tenth year of losses for French Connection.

Overall, the group has 116 stores and concessions and a further 212 franchised outlets - down by 6.5pc and 26pc respectively over the past financial year.

It was aided, the company said, by the closure of 11 loss-making stores which helped like-for-like sales climb 0.8% in the United Kingdom and Europe.

He said that although it was clear that the retail market in which French Connection is operating in the United Kingdom is "unlikely to improve in the near future" he expects to see the benefits from "ongoing portfolio rationalisation" going forward.

"Although we are only early into the year, I believe we are in a very strong position to make significant progress again", said Mr Marks.

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