French Connection reports sales bounce since Easter holidays

Trendy fashion label French Connection remained upbeat about its recovery yesterday after reporting a "significant" pick-up in sales since the Easter holiday break.

The strong growth over recent weeks helped the chain offset difficult conditions at the start of the year, although like-for-like sales for its UK and Europe retail arm were still 1.8 per cent lower between 1 February and 14 May.

Across the group, revenues in the first three months of its financial year were 3.6 per cent ahead of the same period last year, driven by strong business with wholesale customers. FC also noted a sales boost in the lead up to last month's royal wedding.

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The firm returned to profit in its most recent financial year and confirmed yesterday that it was on track to meet objectives for this year.

It has revived its fortunes with a restructuring that has seen it sell the loss-making Nicole Farhi brand and close its Japanese business and some stores in North America and Europe.

The shake-up left the group - which uses the controversial FCUK branding - with its UK and European retail and wholesale operations, the Great Plains wholesale-only ladieswear range and Toast, its mail-order fashion and homewares brand.

Brokerage Seymour Pierce upgraded its recommendation on FC's shares to "buy" from "hold" following the trading update. Analyst Freddie George said: "We are upgrading because of the stock's low valuation, the strength of the balance sheet and the potential for developing the business overseas."

Numis Securities lifted its guidance to "buy" from "add" but kept its forecast for pre-tax profits of 8.8 million unchanged. Analyst Andrew Wade said: "We continue to recognise the opportunities for French Connection to improve retail and build its wholesale and licensing businesses."