FRENCH CONNECTION NET LEAPS 91.8% FOR 1ST HALF, DESPITE U.S. SALES DRAG
Byline: James Fallon
LONDON — French Connection PLC reported a 91.8 percent jump in after-tax profits to $3.1 million (1.95 million pounds) for the first half ending July 31 despite a continued poor performance by its U.S. operations.
The women’s, men’s and children’s wear company — which owns the Nicole Farhi designer company, in addition to the French Connection business — said sales rose 14.1 percent to $67.2 million (41.72 million pounds).
The results compare with after-tax profits of 1.02 million pounds on sales of 36.57 million pounds in the corresponding period a year earlier. Earnings per share rose 142.5 percent to 16 cents (9.7 pence) from 4 pence.
French Connection said in a statement that the difficult retail market in America overall continued to impact its operations there. Its retail sales fell sharply on a same-store basis, but this was offset by the opening of new stores. Retail sales overall in the U.S. fell 3.7 percent to $8.4 million (5.2 million pounds) from 5.4 million pounds. Wholesale sales increased 5.4 percent to $6.3 million (3.9 million pounds) from 3.7 million pounds. The company did not break out its U.S. profits.
“We have invested considerable time and effort to improve performance [in the U.S.] and we believe the benefit of this will be seen in due course,” the company said.
It added it will open stores in Pasadena, Calif., and the Coconut Grove section of Miami in the second half.
In its core U.K. market, retail sales rose 31 percent to $25.8 million (16 million pounds) from 12.2 million pounds as a result of strong increases in same-store sales and the contribution of new stores in Oxford, Bicester and Manchester. Gross margins and operating profits also increased sharply because of better visual merchandising and improved stock management, the company said.
Wholesale sales in the U.K. increased 29 percent to $24.2 million (15 million pounds) from 11.6 million pounds.
The company continues to strengthen its distribution network throughout Europe, adding two more leased departments in Denmark as well as French Connection franchise stores in Chester and Cardiff.
Its aggressive expansion will continue in the second half with stores opening in Newcastle, Watford and its first store in Continental Europe in Amsterdam.
It also will add leased departments in three Inno department stores in Belgium, as well as a leased department in Sweden.
In the Far East, it recently opened an area in the Tangs department store in Singapore and will add a French Connection area in Dickson Poon’s Seibu store in Hong Kong later this year to go along with the two Nicole Farhi areas it opened in the first six months.