French Connection shares (LON:FCCN) dropped by over 12% on Tuesday following the release of a half-year update.
The UK-based retailer said that group revenue for the six months to 31 July amounted to £51 million – a 12.2% decline compared to the £58.1 million figure from 2018.
French Connection said that the decline in group revenue was driven by “the ongoing reduction of the store portfolio and a shift in timing of wholesale shipments into the second half of the year”.
The company added that operating loss from continuing operations improved to £3.7 million compared to £5.5 million from the year prior.
“I am pleased that the changes we have made to the business over the last few years continue to move us forward,” Stephen Marks, Chairman and Chief Executive, commented on the results.
“There is no doubt that progress has not been helped by the trading conditions in which we operate in the UK, although our retail performance has been resilient, overall the wholesale business is strong and we continue to see good stability in the licence income,” the Chairman and Chief Executive continued.
Indeed, retailers across the UK have been struggling for survival amid the gloomy trading conditions to have hit the UK high street.
“The order books we have provide a clear outlook for the second half of the year in wholesale but it appears that retail conditions will continue to be challenging. Underpinned by these results we remain fully on track to achieve our expectations for the financial year.”
After speculation, French Connection confirmed last October that it may be up for sale.
French Connection added that it initially expected the strategic review and formal sale process to end during the first half of the year, but has extended the period given the “active ongoing discussions”.
“Discussions are still ongoing with a number of parties,” French Connection said.
Shares in French Connection Group (LON:FCCN) were trading at -12.37% as of 09:00 BST Tuesday.