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4-Traders Homepage  >  Equities  >  London Stock Exchange  >  French Connection Group    FCCN   GB0033764746

FRENCH CONNECTION GROUP (FCCN)
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UK fashion chain French Connection racks up narrower loss

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09/19/2017 | 03:38pm CEST
A person walks past a French Connection store in London, Britain

(Reuters) - British fashion retailer French Connection Group Plc (>> French Connection Group) reported a narrower operating loss for the first half and said it was making progress in its attempt to return to profitability.

(Reuters) - British fashion retailer French Connection Group Plc (>> French Connection Group) reported a narrower operating loss for the first half and said it was making progress in its attempt to return to profitability.

The owner of the Toast, French Connection and Great Plains brands has been struggling to fend off competition from fast-fashion rivals, such as ASOS (>> ASOS plc) and Inditex's (>> Inditex SA) Zara. It has closed stores and hired new management and design teams as it tries to turn the corner.

In March activist investor Gatemore Capital urged the loss-making company to split itself or spin off its Toast brand, among other options. It offloaded its entire stake in July, saying it was not satisfied with the pace of change at the 45-year old retailer.

British billionaire Mike Ashley's Sports Direct International (>> Sports Direct International) currently holds a 27.04 percent stake in French Connection and is the second-largest shareholder in the company. Sports Direct's intentions were not clear.

French Connection said its group operating loss for the six months to July 31 came in at 5.7 million pounds, down from 7.9 million in the prior year.

But revenue came in at 68.1 million pounds, down from 69.2 million pounds year ago. The company closed seven stores over the last 12 months, reducing its trading space by 10.2 percent. It has 349 branded locations in total.

Sales at stores open for more than a year in the UK and Europe were "broadly flat", it said on Tuesday.

However, revenue at its wholesale operation rose 7.2 percent to 29.6 million pounds, with the business returning to growth in UK, Europe and North America.

"We have definitely seen momentum build in the first half of the new financial year with improvements across all the divisions despite difficult trading conditions," Chairman and Chief Executive Stephen Marks said, admitting that there is a lot to do before company returns to profitability.

French Connection posted its fifth annual loss in a row in March.

Analysts at Numis Securities, which acts as broker to the company, expect the company to return to profit in 2019, citing the store rationalisation programme and tighter cost controls.

French Connection's current position is a far cry from the heady days of 2004 when the huge success of its FCUK brand boosted the company's shares to more than 500 pence.

The stock has plummeted since and was trading 2.3 percent lower at 44.12 percent by 1315 GMT.

(Reporting by Rahul B in Bengaluru, editing by Louise Heavens)

Stocks mentioned in the article
ChangeLast1st jan.
ASOS PLC 0.36% 6094 Delayed Quote.-9.25%
FRENCH CONNECTION GROUP 0.91% 55.5 Delayed Quote.56.34%
INDITEX - INDUSTRIA DE DISEÑO TEXTIL 0.00% 29.27 End-of-day quote.0.77%
SPORTS DIRECT INTERNATIONAL 2.86% 416.6 Delayed Quote.10.50%
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Latest news on FRENCH CONNECTION GROUP
05/23FRENCH CONNECTION : Results of AGM 2018 (pdf)
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More news
Financials (GBP)
Sales 2019 144 M
EBIT 2019 1,60 M
Net income 2019 1,60 M
Finance 2019 9,90 M
Yield 2019 -
P/E ratio 2019 34,69
P/E ratio 2020 19,82
EV / Sales 2019 0,30x
EV / Sales 2020 0,28x
Capitalization 52,9 M
Chart FRENCH CONNECTION GROUP
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French Connection Group Technical Analysis Chart | FCCN | GB0033764746 | 4-Traders
Technical analysis trends FRENCH CONNECTION GROUP
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TrendsBullishBullishBullish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 2
Average target price 0,62  GBP
Spread / Average Target 11%
EPS Revisions
Managers
NameTitle
Stephen A. Marks Chairman & Chief Executive Officer
Neil P. Williams Chief Operating Officer & Executive Director
Lee Williams CFO, Secretary & Executive Director
Sarah Curran Independent Non-Executive Director
Robin A. K. W. Piggott Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
FRENCH CONNECTION GROUP56.34%69
INDITEX - INDUSTRIA DE DISEÑO TEXTIL0.77%106 897
KERING23.87%73 321
FAST RETAILING CO LTD16.13%49 946
ROSS STORES7.90%32 925
ZALANDO8.22%13 959