Weak Wholesale And Licensing Business Of UK Apparel Retailers Is Expected To Revive In The Second Half Of The Year.

Britain

The French Connection Group PLC released today's interim results show that it has entered a fifth year loss.

The founder and chairman, chief executive officer, Stephen Marks, has formed a greater pressure to step down.

But the group stressed that the largest market for retail sales in the UK and Europe has resumed growth, and that the sluggish wholesale and licensing businesses are expected to recover in the second half.

In the first half of July 31st, Britain and Europe accounted for French Connection Group PLC 78% revenues.

The same store sales recorded a growth of 6.5%, mainly driven by the sales sentiment of the spring and summer series, and the low base (down 10.7%) in the same period last year helped. The group revealed that its sales performance remained strong in the first 6 weeks of the second half of the year.

However, the retail revenue decreased by 2.3% to 41 million 600 thousand pounds compared with the previous year, due to a 15.8% reduction in the closing strategy. During the period, the group closed 5 loss stores, and the same number of shops will be further closed in the second half of the year. The sales of e-commerce accounted for 26.5% of the retail revenue, which was 22.3% at the end of 2015.

Wholesale sales fell by 16.9% to 27 million 600 thousand as wholesalers in Europe and North America refused to place orders because of poor performance last year.

Authorized income has also been reduced by 20% to 2 million 400 thousand pounds.

The total revenue of the medium-term group totaled 69 million 200 thousand pounds, down 8.7% from 75 million 800 thousand a year ago.

Thanks to the increase in the proportion of retail sales, gross margin increased slightly by 50 basis points to 46%.

The pre tax deficit remained at 7 million 900 thousand pounds a year ago.

As of July 31st, the group was not in debt, but net cash was reduced by half to 7 million 700 thousand pounds from 15 million at the end of 2015.

Stephen Marks expressed disappointment at its interim results in its earnings report. He pointed out that the annual performance is as important as ever seen in the most important Christmas holiday season, and the group started well in the second half of the year.

The Stephen Marks, which founded French Connection Group PLC in 1972, has become a sniper target for radical shareholders in the past two months.

The US hedge fund Gatemore Capital Management LLC holding French Connection Group PLC 8% shares the requirement that Stephen Marks Marks be responsible for the decline of the brand over the past 10 years and step down, replace two non-executive directors, 9 year old non-executive directors, Dean and Group, and abolish the brand name "brand" that has been used so far since the customer has no longer "inspiring" role.

Gatemore Capital Management LLC criticizes the group's "disappointing" performance since the 2008 financial crisis, which has been fully surpassed by Ted Baker PLC TED.L (TED.L) and Superdry brand parent SuperGroup PLC (yen) and so on, leading to a weaker stock price trend.

Over the past 10 years, the group's sales have shrunk by 1/3, and since its record high of 5 pounds in 2004, the share price of French Connection Group PLC (FCCN.L) has fallen by more than 90% so far. The stock closed at 43.62 pence on Monday 19, with a market value of only about 39 million pounds.

The low market value of French Connection Group PLC also made it a target of acquisition.

The UK quoted the news that Rutland Partners LP, from 1 and February this year, began joint research on Quarto Advisors Ltd. of retail consulting firm to acquire French Connection Group PLC at 40 million pounds, when the stock price of the group was at 40 pence.