French Connection Group (LON:FCCN) shares jumped 9.2% on Tuesday as the high street fashion retailer reported a smaller annual operating loss and said it is close to returning to profitability, while also revealing that it received an unsolicited bid approach last year which failed to lead to an offer.
The FTSE fledging firm posted an operating loss for the year ended 31 January 2018 of £2.3mln, down from a £5.3mln loss a year earlier, as its revenue increased by 0.5% to £154.0mln, up from 153.2mln.
READ: French Connection posts fifth consecutive annual loss but sounds confident outlook
The clothing retailer said its like-for-like sales grew 0.8% in the UK and Europe, while wholesale revenues increased by 8.6% to £70.9mln, up from £65.3mln a year earlier.
French Connection said it closed 11 non-contributing stores during the year but opened a new concept store in Manchester, with the retail market in the UK still “particularly challenging.”
Stephen Marks, the stores group's chairman and chief executive said: “Our goal has been to return the Group to profitability and I believe we are very close to achieving that aim, given the momentum that we are currently seeing within the business.”
He added: “While it is clear that the retail market in which we are operating in the UK is unlikely to improve in the near future, we have clear visibility on the benefits we will obtain from the ongoing portfolio rationalisation.”
Noting legal costs associated with due diligence work, French Connection said it had a bid approach came from a US-based company last year and entered a period of discussions "over a number of months", but ultimately it did not lead to an offer.
In mid-morning trading, French Connection shares were 9.2% higher at 36.8p.