French Connection losses narrow as it reveals aborted takeover interest

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French Connection losses narrow as it reveals aborted takeover interest

The group narrowed its pre-tax losses to £2.3m, smaller than a £5.3m loss in the prior year. Total retail revenue was down 5.5% to £83.1m but total wholesale revenue was 8.6% higher at £70.9m, while retail like-for-like sales grew 0.8%, down from a 4.4% increase the year before.

Shares in French Connection rallied on Tuesday as the fashion retailer reported a narrowing of its full-year losses and said it was close to returning to profitability.

Elsewhere, HemoGenyx Pharmaceuticals PLC (LON:HEMO) was the market's biggest gainer, with the AIM-listed shares leaping 24.4% to 3.82p as the group said it has entered into a collaboration with a major U.S. biotechnology company in a deal worth up to approximately US$250,000.

It said like-for-like sales, which compare the performance across the same shops, rose by 0.8 per cent in the United Kingdom and Europe, while wholesale revenues increased by 8.6 per cent.

"While it is clear that the retail market in which we are operating in the United Kingdom is unlikely to improve in the near future, we have clear visibility on the benefits we will obtain from the ongoing portfolio rationalisation", Chief Executive Officer Stephen Marks said.

But Mr Marks said he believed French Connection was well-placed to weather the continuing pressures.

"While it is clear that the retail market in which we are operating in the United Kingdom is unlikely to improve in the near future, we have clear visibility on the benefits we will obtain from the ongoing portfolio rationalisation".

This is down from 65 full-price stores in 2013 and around 36 now.

Another eight stores are expected to close this year.

French Connection has reported its sixth consecutive year of annual losses but said it had taken a "significant move forward" in its attempt to return to profitability.

The company, which also owns the Great Plains and YMC brands, said on Tuesday it closed an additional 11 non-contributing locations during the year.

Past year it came under heavy fire from investors, with activist investor Gatemore Capital Management calling for a break-up of the company and for Mr Marks to give up his double role as chairman and chief executive.

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