FASHION group French Connection offered a glimmer of sales hope yesterday as it attempted to allay investor fears over another year of plummeting profits.
The high street label reported pre-tax profits down 67% to £4m for the year ended January 31, after a 53% profits drop in the previous year.
But the group said encouraging sales growth in its autumn/winter 2006 and new spring/summer ladieswear collections represented the start of a "new phase" for the label.
Like-for-like sales of French Connection's autumn/winter 2006 ladieswear range grew by 6% prior to the January sales, while in the UK and across Europe, like-for-like sales across the board for both ladies and menswear in the spring/summer 2007 collection rose by 10% in the first few weeks.
French Connection chairman Stephen Marks said: "The financial results for the last year are very disappointing, however we believe there is good evidence to indicate we are at the start of anew phase in our business cycle."
He added the more recent upturn in sales, together with support from the fashion press, were "early signs" of a turning point
The group said it hoped to achieve 5% growth in full-price sales over the next year in its retail division.
Retail revenues across UK and Europe increased by 3% to £116.1m, with like-for-like sales growth of 1%.
French Connection's wholesale arm, however,saw revenues fall 16% to £63.4m, with total sales down 25% in the first half and only marginally improving in the second half to a 6%decline.
The decline in group profits come despite the brand spending £6.3m more last year on advertising and promotional work.
French Connection has struggled over the past two years, with its £4m profits recorded yesterday just a fraction of the £38.5m made three years ago.
The firm came under fire last year over an advertising campaign featuring alesbian kiss, which attracted more than 100 complaints
Article
