French Connection Group PLC (LON:FCCN) said trading picked up in the summer after stores reopened but the trend has now “reversed slightly” after renewed coronavirus pandemic restrictions.
The fashion designer said wholesale customers are growing in confidence in the UK, with their intake of winter goods improving and reorders running ahead of last year driven by more casual product, while there has been “a very good reaction from customers” to the summer 2021 collection.
In the US there is more caution from the department stores, with winter goods only really starting to flow more recently, it added.
The firm agreed a £15mln working capital facility with Hilco Capital in July after it did not qualify for government-backed financing schemes, though it put some employees on furlough and benefitted from business rates holidays.
In the six months to July 31, 2020, French Connection's revenue slumped by 53% to £23.9mln while its underlying loss widened to £12.2mln from £3.6mln the year before.
Gross margins were impacted by both the loss of the full price selling period during lockdown and higher levels of current and older stocks remaining at the period-end.
Shares slipped 17% to 7.44p on Tuesday morning.
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