The share price of French Connection (LON: FCCN) dived 17 percent as the fashion company revealed an interim loss of £12.2m.
Alongside the underlying loss was a 53.1% reduction in revenue to £23.9m.
The fall in headline numbers was reflective of one-off stock provisions and significant decline in sales following store closures.
With FCCN shares having gained momentum in the run-up to today’s announcement by reaching 9.9p on Monday, investors were left disappointed as the company continued to paint a bleak picture of reality as shares crashed back down to 7.4p.
Commenting on the results, Stephen Marks, Chairman and Chief Executive said:
“This has undoubtedly been the most difficult trading period that the Group has ever faced and I would like to thank our staff, both those who have kept the business running and those who have been on furlough, for their ongoing commitment to French Connection. Despite the unprecedented difficulties we continue to face alongside the rest of the High Street, having been able to secure the necessary financing we feel that we are well positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise especially given the good performance of wholesale, while maintaining a very tight control of costs.”
Could FCCN be acquired?
With French Connection’s m. cap at £7m – it could potentially become an acquisition target for a firm who will be better be able to integrate the brand into an established, profitable network who could pounce on any further falls in value.
FCCN is still a well-known brand with double-digit sales revenue.
Boohoo has made a habit of pouncing on well-known brands that have been struggling, likewise the likes of Frasers Group are well known for acquiring struggling British fashion brands. The brand is also widely available at the likes of ASOS.
In fact, Mike Ashley’s Frasers Group holds 26% in French Connection although has previously not been interested in adding further.