British fashion group French Connection said it would close more underperforming stores after it shut down its North European retail business and cut staff in the first half to stem widening losses.
The company said it continued to be "severely affected by difficult retail environments" and would "close stores which do not make an appropriate contribution", following the closure of nine stores and concessions in the first half.
The company, which controversially began branding its clothes 'fcuk' in 1997, reported a pretax loss of £12.8 million on revenue 4 per cent higher at £116.9 million for the six months to the end of July.
The retailer and wholesaler said like-for-like sales in its UK/Europe retail division, which accounts for over half its turnover, rose 2 per cent during the period with its core gross profit margin falling to 50.8 per cent from 51.8 per cent in the same period last year, primarily due to the weakness of sterling.
Like-for-like sales in North America retail, accounting for some 16 per cent of turnover, were down 3 per cent and margins were 6.5 per cent lower due to increased promotions.
French Connection, which also owns designer label Nicole Farhi and the TOAST, YMC and Scorah Pattullo brands, also said wholesale orders in both regions were down.
"There is little evidence that the fashion retail market in UK/Europe will recover in the short term and we will continue to operate cautiously in relation to managing inventory and reducing overheads where possible," the company said.
Shares in French Connection, which have risen 12 per cent this year, closed at 57.50 pence yesterday, valuing the group at around £55 million.
Reuters