British fashion retailer French Connection
FCCN
He warned that he could run out of cash in “the next few months” unless he gets more money or sales start to improve.
The London-listed company plans to reopen its stores on June 1, but said it did not expect to return to norm al trading levels “for some time”, despite a slight increase in activity in Europe as a country. they come out of the closure.
French Connection said discussions have started with a number of potential funding partners and that the board hopes to raise enough funds to support the business until bargaining levels rebound. But he warned that “without obtaining additional funds and if the current activity levels affected by Covid-19 continue, the company’s liquidity will eventually erode in the coming months”.
The headline was up 1.3% on Tuesday but has dropped 84% so far this year.
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The retailer, whose stores and dealers have been closed since March, said it had seen a “significant reduction” in sales following the pandemic. He added that many of his American wholesale customers had delayed payment of the shares, making his problems worse.
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Online sales from their own websites in the United Kingdom and the United States United States They have increased by 44% in the past six weeks and have continued to supply certain wholesale customers. However, the company said it is only a small proportion of the overall business.
French Connection said it has taken a number of steps to save money and cut costs, including talking to landlords during the rental vacation, rescheduling tax payments, and requesting vendor rebates. He used the UK government’s job retention and trade rate reduction program, but said he was unable to access other government support programs due to “qualification restrictions strict “.
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The retailer, formerly known for its controversial brand FCUK, has not reported pre-tax profits since the year ending January 2012, according to FactSet data, and sales have fallen in six of the past seven years. As of January 31, 2020, sales fell 11.4% to £ 120 million with a pre-tax loss of £ 7.4 million.
The company had net cash of 8.1 million pounds as of January 31, according to preliminary results for the year, compared to 16.2 million pounds the previous year.