Shares in French Connection rose sharply on Tuesday after the fashion house announced that it had managed to considerably narrow financial losses last year – a rare piece of good news for the UK’s ailing retail sector.
The company said that pre-tax losses fell to £2.3m for the year to the end of January, from £5.3m a year earlier.
It said like-for-like sales, which compare the performance across the same shops, rose by 0.8 per cent in the UK and Europe, while wholesale revenues increased by 8.6 per cent.
“We have made considerable progress across the group over the last year and I enter the new financial year with renewed confidence off the back of that success,” said chairman and chief executive Stephen Marks.
“Our goal has been to return the group to profitability and I believe we are very close to achieving that aim, given the momentum that we are currently seeing within the business,” he added.
He said that although it was clear that the retail market in which French Connection is operating in the UK is “unlikely to improve in the near future” he expects to see the benefits from “ongoing portfolio rationalisation” going forward.
French Connection has for some time been closing stores in an attempt to stave off broader market pressures.
“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.
The UK’s retail sector has endured a brutal few months with big names like Toys R Us and Maplin filing for administration and fashion chain New Look announcing hundreds of store closures.
A lethal combination of high inflation, rising business rates, an increase in minimum wages and bruised consumer confidence has led many analysts to forecast several more months of headwinds.
But investors cheered French Connections’ results on Tuesday, sending shares in the group up by more than 17 per cent in early trading.