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French Connection Issues Profit Warning
Fashion retailer, French Connection, has announced that it is unlikely to meet its full-year profit targets after sales have continued to decline.
In the 15 weeks to 7th May, group revenues declined 9.5% compared to the same period last year, and like-for-like sales fell 12% in Europe and the UK. Now the company’s shares have fallen 24% to 30p following the profit warning.
Numis has removed the company from its buy list, saying, “Although we continue to believe that French Connection has strong global brand equity, the rate of decline in the core UK retail operation shows no sign of stabilising and we see only limited opportunity for quick fixes from the strategy review currently being undertaken”. However, Oriel Securities has stuck with its ‘buy’ recommendation.
In a statement released today, French Connection said, “We have appointed external specialist advisors to support management in this process and we are working quickly towards delivering both short-term gains and long-term strategies to improve the sales densities and gross margins with our retail portfolio. We also continue to work hard actively managing our retail store portfolio including lease re-negotiations”.
The profit warning comes two months after the company announced a loss of £8.2m in its last financial year, which resulted in the closure of 14 UK stores. The company has stressed that its balance sheet is strong, with £11.3m of cash in the bank. Now it will focus on new projects, such as a range of premium womenswear, and broadening its homewares sector, both in-store and online.
Sample Entry
John Lewis PLC
|
171 Victoria Street, London, United Kingdom |
|
| Telephone: |
020 7828 1000 |
| Fax: | 020 7592 6333 |
| Email: | enquiries@johnlewis.co.uk |
| Website: | www.johnlewis.com |
| Product/Activity: |
Department Store, Multiple Retailer |
| No. of Branches: | 29 |
| Branch Region: | Nationwide |
| Number of Staff: | 1001+ |
| Turnover: | 100M + |
| Year Established: | 1864 |
| Chairman |
Mr Avid Barclay (Deputy Chair) |
| Chairman |
Mr Charlie Mayfield (Chairman - John Lewis Department Stores) |
| Managing Director |
Mr David Barford (Managing Director - John Lewis Kingston) |
| Managing Director |
Mr Jonathan Field (Managing Director - John Lewis Norwich) |
| Also Including 155 staff and 83 other buyers | |
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Statistics
Employment in the retail sector has fallen by over 76,000 in the last five years