TIDMFCCN
RNS Number : 7943W
French Connection Group PLC
28 April 2021
28 April 2021
FRENCH CONNECTION GROUP PLC
Preliminary Results for the year ended 31 January 2021
Year significantly impacted by COVID-19 pandemic but now moving
in the right direction once again
French Connection Group PLC ("French Connection" or "the Group")
today announces results for its financial year ended 31 January
2021.
Highlights:
-- Group revenue of GBP71.5m (2020: GBP119.9m), down 40.4% with
the COVID-19 pandemic causing store closures and reduced demand
from wholesale customers
-- Underlying loss of GBP(11.7)m (2020: GBP(2.9)m), driven by
the significant decline in sales, additional one-off stock
provisions, offset by cost reductions across all areas
-- Wholesale revenues were GBP49.0m (2020: GBP73.2m), down
33.1%, with customers particularly impacted during the first
national lockdown, however UK online customers performed strongly
in second half
-- Retail revenues were GBP22.5m, down 51.8% (2020: GBP46.7m),
due to the store closures during the three national lockdowns and
footfall being impacted by restrictions at other times, although
within this, online sales were up 7.1% driven by Homeware and
casual clothing
-- Gross margins were impacted by both the loss of the full
price selling periods during national lockdowns and higher levels
of residual stock at the period end
-- A strong focus on cost reduction achieved savings across all
areas of the business including rent re-negotiations with
landlords, business rates relief, use of the furlough scheme and
headcount reductions
-- Closing net debt of GBP1.3m (2020 net funds: GBP8.1m)
Commenting on the results, Stephen Marks, Chairman and Chief
Executive said:
"Our key focus for the year has been to navigate our way through
the difficult challenges we have faced as a result of the COVID-19
pandemic.
Initially we worked with our key stakeholders to stabilise the
business and secure new financing. Trading had been broadly in line
with our expectations at the time of the financing but we were then
hit by the second and third national lockdowns in the UK. Given the
new financing, together with the actions being taken to optimise
sales, tightly manage costs and preserve cash, we are confident
that the Group is well positioned to navigate any further period of
uncertain consumer demand.
Our staff have had to work remotely for long periods of time and
considerable numbers have been on furlough. I thank them all for
their efforts and patience during these trying times.
Looking ahead I am pleased that the wholesale business in both
the UK and USA has bounced back for the Summer and Winter seasons,
even with the continued uncertainty and lockdowns. E-commerce sales
are growing with the Summer collection selling very well.
With stores having predominantly re-opened in the UK, we are
seeing a much better sales performance than we experienced at the
end of the first national lockdown although it will take time to
see how quickly things develop over the coming months, in our own
stores but also for our wholesale customers. Overall though I feel
that we are definitely moving in the right direction once
again."
Neil Williams +44 (0) 20 7036
Enquiries: Lee Williams French Connection 7207
Tom Buchanan Paternoster +44 (0) 20 3012
Charlie Codrington Communications 0241
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CHAIRMAN'S STATEMENT
Dear Shareholders
As I said in our Interim Statement in October, this year has
been the most difficult the business has ever faced. The remedial
actions we put in place during the first half of the year have
served us well, with the underlying operating result in the second
half of the year in line with last year. Given the ongoing
challenges we have all faced during this period, it is satisfying
to have been able to make some progress, although the overall
result for the year is disappointing. As with all non-essential
businesses we have had extended periods of closure of our own
trading locations and those of our wholesale customers throughout
the year as a result of the COVID-19 pandemic. When we have been
able to trade, footfall was considerably reduced. The only channel
to have benefitted has been e-commerce, with both our own sites and
those operated by our customers performing strongly both in the UK
and USA.
As previously announced, we took immediate and decisive action
to manage the significant pressure on the Group's operations and
liquidity as a result of the disruption caused by the COVID-19
pandemic. These involved working with many of the Group's key
stakeholders including all suppliers and landlords to actively
manage both current and future commitments in order to preserve our
cash resources. We also recognised that additional funding would be
required to secure the future of the business and so, as announced
in July 2020, we secured a GBP15 million working capital facility
for a two-year period to cover the Group's cash requirements over
that time. Additionally, in December 2020 we also received a $6.5m
loan from the Main Street Lending Programme to support our USA
based operations. During the second half of the year, we
implemented a review of our head office and store staffing
structures to achieve the reduced levels required for the business
going forward. Although net debt was only GBP1.3m at the end of the
year, the facilities will provide the working capital required for
the year ahead.
In line with many other retail and wholesale businesses, the
overall financial performance is considerably worse than last year
given the pandemic situation. Group revenue was GBP71.5m (2020:
GBP119.9m), with a resulting underlying loss of GBP(11.7)m compared
to GBP(2.9)m last year. This movement is primarily driven by the
significant reduction in revenue and additional one-off stock
provisions reflecting the higher residual stock levels in the
business, particularly from the Summer season, where the timing of
the initial lockdown was too late for us to take significant action
regarding the intake of goods. This has been partially offset by
cost savings across all areas, with assistance from the furlough
scheme and business rates relief.
Wholesale
Revenue for the year was GBP49.0m (2020: GBP73.2m). Driven by
the pandemic, revenue was down across all territories, although
less so in the UK with a higher proportion of customers within the
client base with strong ecommerce propositions. In addition new
season deliveries to customers were impacted by end of year
shipping delays due to reduced capacity, particularly from Asia.
Gross margins were 22.4% (2020: 30.2%), impacted by the loss of
full price sales within the revenue mix driven by the timing of the
closures together with higher levels of stock provision required in
the USA. In response to this, costs have been significantly reduced
with all non-essential expenditure stopped, the furlough scheme
utilised, and fixed head count removed where possible, resulting in
a 32.6% reduction (32.7% CCY). Overall, this has resulted in an
underlying operating contribution of GBP5.0m (2020: GBP13.2m).
The current order banks for Summer 21 and in particular Winter
21 represent a good bounce back to previous levels reflecting the
strength of the collections and provides us with a solid start to
the new financial year. Underpinning this growth is the strength of
the pure play online businesses and the multi-channel operators
with an established ecommerce presence. The challenges thrown up by
not being able to meet customers in person in order to present
product has accelerated the requirement to be able to show
collections online remotely, which we have successfully achieved.
Although this is a very useful alternative, it is not a long-term
replacement.
Retail
Overall revenue fell to GBP22.5m from GBP46.7m last year. During
the year the store portfolio was predominantly closed for 21 weeks.
When the portfolio reopened, trading, particularly in the important
Christmas period post the November lockdown, was considerably below
last year. In addition, a further 14 locations (seven stores and
seven concessions) were permanently closed during the year. As
expected though, there has been a number of more favourable rental
deals as leases have come to an end. We have been able to remain in
some but not all of those locations, on favourable and flexible
terms. We are very grateful to a considerable number of our
landlords who have assisted us with rent holidays and deferrals
while the stores have been closed. In the USA we exited the last
remaining two stores at the end of the year. Looking forward we
expect another two stores to close in the UK this year but will
closely monitor the performance of all stores. The average lease
length of the remaining stores is 1.9 years (2020: 2.5 years).
CHAIRMAN'S STATEMENT (continued)
Gross margin was 18.1% down from 51.0% last year. This reflects
the significant loss of full price sales when the stores were
closed, higher markdowns in the summer sale to assist stock
clearance due to the highly promotional nature of the market as
well as one-off stock provisions required given the closing
inventory levels. In mitigation on the cost side, together with the
rent reductions referred to above, we have participated in the
furlough scheme, benefitted from the business rates relief, saved
variable commission in the concessions and eliminated all
discretionary spend. As a result, the underlying loss for the year
has only slightly increased by GBP0.4m to GBP(10.4)m.
Within this, the ecommerce business grew by 7.1% across the
year. There was stronger growth in the first half driven by more
promotional activity to match competitor activity. The second half
experienced slightly slower growth, albeit with stronger gross
margins as lower stock levels required less discounting for
clearance. This performance was driven by Homeware and more casual
clothing, both of which did particularly well across the year.
Now the stores have re-opened again, we will start to see how
footfall and trade develops however the initial performance is much
better than we experienced last time. Based on our experience last
year we expect to now gradually build, especially in places like
central London where there has been a lack of tourists and office
workers. Outdoor locations such as outlet malls performed much
better after the first lockdown and we are seeing the same again.
Ecommerce has started the year very well with growth in both
revenue and gross margin, particularly in the last few weeks.
Licensing
License income for the year was GBP3.9m compared to GBP5.5m last
year. Our licensees have generally seen a similar impact on their
business as we have, both in the UK and USA, given the wholesale
nature of the channel. Within this though, DFS has performed very
well with business strong when their stores have been open, in
addition to an excellent online experience, driving sales during
lockdown and showing the strength of the brand. We launched some
new smaller USA licensees in the year with shoes in particular
starting off well given the circumstances.
Operating expenses
As described in the divisions above, we reduced all costs that
we could over the year. In addition to the short-term savings
achieved we put in place the Head Office and Store staff reductions
which will benefit us as we move forward. The focus on managing
costs will be maintained as we grow back, to ensure that only
essential increases are allowed.
The Group ended the year with net debt of GBP1.3m compared with
GBP8.1m of cash last year. This movement predominantly reflects the
losses that have been generated but also low levels of capital
expenditure on IT, financing costs associated with the new credit
facilities put in place and costs associated with the
reorganisation implemented during the year. The Board have decided
that there will be no dividend paid for the year.
In early February we disclosed that we had received two very
early stage approaches from third parties which may or may not
result in them making an offer for the Company. Following the
announcement, a number of other parties showed interest and so we
agreed with the UK Takeover Panel that any discussions in relation
to an offer for the Company may take place within the context of a
formal sale process, in order to enable the conversations with the
parties interested in making such a proposal to take place on a
confidential basis. These discussions continue although at this
point there can be no certainty that an offer will be made for the
Company. Further updates will be made as and when appropriate.
Board changes
I would like to thank Robin Piggott, who resigned from the Board
in August 2020, for his considerable efforts during his time with
us and welcome Neil Page who recently joined as Independent
Non-Executive Director in March 2021 and now chairs the Audit
Committee and is also a member of the Remuneration Committee.
CHAIRMAN'S STATEMENT (continued)
Summary
Our key focus for the year has been to navigate our way through
the difficult challenges we have faced as a result of the COVID-19
pandemic.
Initially we worked with our key stakeholders to stabilise the
business and secure new financing. Trading had been broadly in line
with our expectations at the time of the financing but we were then
hit by the second and third national lockdowns in the UK. Given the
new financing, together with the actions being taken to optimise
sales, tightly manage costs and preserve cash, we are confident
that the Group is well positioned to navigate any further period of
uncertain consumer demand.
Significant effort has been made on ensuring appropriate
measures are in place to protect the safety and wellbeing of all
our colleagues, customers and business partners, to ensure that we
can all operate in a safe environment. Our staff have had to work
remotely for long periods of time and considerable numbers have
been on furlough. I thank them all for their efforts and patience
during these trying times.
Looking ahead I am pleased that the wholesale business in both
the UK and USA has bounced back for the Summer and Winter seasons,
even with the continued uncertainty and lockdowns. E-commerce sales
are growing with the Summer collection selling very well.
With stores having predominantly re-opened in the UK, we are
seeing a much better sales performance than we experienced at the
end of the first national lockdown although it will take time to
see how quickly things develop over the coming months, in our own
stores but also for our wholesale customers. Overall though I feel
that we are definitely moving in the right direction once
again.
Stephen Marks
Chairman and Chief Executive
28 April 2021
Notes:
1. Underlying Operating result excludes adjusting items (Note 4) and discontinued operations.
2. LFL or "Like-for-Like" sales growth is defined as the
year-on-year sales growth for owned stores and concessions open
more than one year, including ecommerce revenues, removing the
impact of closed stores and reported in constant currency.
3. Constant Currency (CCY) is calculated by translating the year
ending January 2021 at 2020 rates to remove the impact of exchange
rate fluctuations.
4. Underlying overheads consist of LFL store overheads.
5. Adjusting items include provisions for bad debts, store and
head office restructuring expenditure, dilapidation costs,
impairment provisions and other professional fees (Note 4).
6. Continuing operations exclude the discontinued results from
the disposed Hong Kong and China joint ventures.
The Directors believe these measures are best reflective of how
the business is managed and are informative to shareholders in
understanding the performance of the business.
FINANCIAL REVIEW
Overall financial performance
The full year results cover the twelve months for the year-ended
31 January 2021 and were significantly impacted by the COVID-19
pandemic and the related lockdown restrictions imposed during this
period, both in the UK and globally. The impact of COVID-19 in the
year has affected the results of all of our business channels. Our
retail stores were closed from late March to mid-June 2020, through
November 2020 and most recently from the start of January 2021 and
have only recently reopened in mid-April 2021. Our wholesale
customers, in particular, the 'bricks and mortar' customers have
been similarly impacted. However, our ecommerce channels, both our
own website and our major wholesale 'pure play' customers have
continued to trade positively even though we have adopted a reduced
promotional stance compared to last year. Our licensing channel has
also been impacted although DFS revenues continue to perform well
with performance during the 'unlocked' periods making up for the
reduced performance during lockdown. Overall, we believe that due
to the COVID-19 lockdown we suffered a GBP39.7m revenue loss and a
consequential GBP10.2m underlying profit impact with poor trading
partly offset by reduced costs and Government support. Full details
of the operational impact on the business are presented in the
'COVID-19' statement.
Underlying result for the full year to January 2021 was a loss
of GBP(11.7)m compared to an underlying loss of GBP(2.9)m in the
comparative period. The underlying result excludes adjusting items
and discontinued operations.
Adjusting items of GBP8.0m (2020: GBP4.4m) in the year relate to
significant material bad debts, impairment and dilapidation
provisions, head office and retail restructuring costs and
professional fees relating to the securing of additional funding to
facilitate the future trading of the Group. Further information in
relation to the adjusting items is provided in Note 4 to the Group
accounts.
Discontinued operations in the prior year relate to the
cessation of our joint venture operation in Asia. The closure of
all of our fourteen joint venture stores in China and Hong Kong was
completed in the second half of the prior financial year and
generated a total loss of GBP(0.5)m. The joint venture trading
result has been presented within discontinued operations in the
comparative year.
The current and prior reporting periods are inclusive of the
implementation of IFRS 16 in the prior year which resulted in
presentational changes to the Income Statement, Statement of
Financial Position and Cash Flow.
Including adjusting items and discontinued operations, the Group
reported a total loss for the year of GBP(19.7)m (2020:
GBP(7.8)m).
As recently announced in our Interim Results in October 2020,
the Group secured a two-year GBP15 million asset based working
capital facility with Hilco Capital on 24 July 2020. Furthermore,
in December 2020, our US business secured additional funding of
$6.5m through the Government sponsored Main Street Lending
Programme. The US loan, through Flushing Bank, Uniondale is for a
period of five years with repayments commencing from the end of the
third year. The Group believes that these combined working capital
facilities are sufficient to cover the Company's foreseeable future
cash requirements based on a 'most likely worst case' stress tested
forecast scenario.
Revenue
Group revenue from continuing operations of GBP71.5m (2020:
GBP119.9m) decreased by 40.4% (39.9% at constant currency). Retail
sales decreased by 51.8% (51.8% at constant currency) to GBP22.5m
(2020: GBP46.7m) with both UK/Europe and North America sales
significantly impacted by COVID-19 store lockdowns throughout both
H1 and H2. The decline in retail revenue was mitigated by
year-on-year ecommerce sales growth which constituted 53.8% (2020:
24.2%) of total retail sales. Wholesale revenue reduced by 33.1%
(32.3% at constant currency) to GBP49.0m (2020: GBP73.2m).
Gross margin
Composite gross margin of 25.7% was significantly lower than the
previous year 38.3% reflecting the lost full price selling period
during multiple lockdowns, increased clearance sales and additional
stock provisioning relating to unsold product at the end of the
financial year. These one-off adjustments to stock provisions due
to COVID-19 amounted to GBP3.1m in total, bringing the margin down
from 30.1% to that reported of 32.9% retail and 22.4% wholesale
(comparative period margins of 51.0% and 30.2% respectively).
Wholesale
Group wholesale revenue from continuing operations of GBP49.0m
was 33.1% (32.3% at constant currency) lower than the prior period
(2020: GBP73.2m). The impact of COVID-19, particularly on our
'bricks and mortar' wholesale customers, has resulted in declines
in all geographic revenues with decreases in UK/Europe to GBP25.8m
(2020: GBP34.7m), North America to GBP22.2m (2020: GBP36.8m) and
the Rest of World to GBP1.0m (2020: GBP1.7m).
FINANCIAL REVIEW (continued)
Group wholesale gross margin deteriorated to 22.4% (2020: 30.2%)
due to increased stock provisions in relation to unsold Spring
product. The decline in overall wholesale sales and a softer margin
resulted in a profitability decrease in underlying wholesale profit
for the year to GBP5.0m (2020: GBP13.2m).
Retail
Group retail revenue of GBP22.5m was 51.8% lower than the
comparative period (2020: GBP46.7m) principally due to the multiple
Government imposed COVID-19 lockdowns on non-essential retail
locations during the financial year. During the year, we closed
seven non-contributing stores and seven concessions, including our
two remaining North America locations. The total number of operated
locations at the year-end was 67 (2020: 81) reflecting a 22%
reduction in average selling space. We continue to review the Group
retail portfolio and opportunities available to renegotiate or
terminate leases.
Retail gross margins of 32.9% (2020: 51.0%) were significantly
impacted by increased stock provisioning with regards to residual
Spring stock as well as additional online promotional activity to
remain competitive and increased Spring product sell through as a
result of store lockdown closures.
Ecommerce revenue as a proportion of Group Retail revenue
increased to 53.8% (2020: 24.2%) as a direct result of the store
closures but also increased sales. Mobile phone transactions as a
proportion of ecommerce traffic also increased to 67.4% of all
online transactions (2020: 63.7%) reflecting the continued focus
and development of our CRM capability and targeted social media
advertising.
Underlying retail loss for the year increased to GBP( 10.4 )m
(20 20 : GBP( 10 . 0 )m). The fall in revenues has been largely
mitigated by a reduction in the retail cost base arising from
Government initiatives including employment furlough schemes and
the business rates holiday. We have also been in active discussions
with landlords regarding rent payment holidays and discounts
together with an extension of existing payment terms.
Geographical analysis
The geographical revenue analysis highlights consistent
year-on-year proportion of sales across the three primary
geographical channels: UK/Europe 64.8% (2020: 64.7%), North America
33.8% (2020: 33.9%) and Rest of World 1.4% (2020: 1.4%).
The impact of COVID-19 has resulted in a reduction in operating
profitability in all geographic regions; UK/Europe loss increasing
to GBP(5.8)m (2020: GBP(1.6)m), North America profit reduction to
GBP1.1m (2020: GBP5.5m) and the Rest of World contributing a loss
of GBP(0.9)m (2020: GBP(0.8)m).
Licensing income
Licensing income of GBP3.9m generated during the year fell by
29.1% (2020: GBP5.5m) as revenues from the majority of licensees
were impacted by COVID-19. However, DFS orders continue to grow
year-on-year with branded French Connection furniture sales
performing well. Due to increased delivery lead times as a result
of delivery challenges and store lockdowns, the strong recovery in
DFS income is expected to be carried forward into the next
financial year.
Operating expenses
Group underlying operating expenses of GBP32.7m (2020:
GBP52.8m), excluding adjusting items, were 38.1% lower than the
prior period primarily due to store closures during lockdown
including negotiated landlord rent discounts as well as local
government rates holidays and salary furlough schemes. We continue
to focus on cost control and efficiency savings.
Total operating expenses including adjusting items were GBP40.7m
(2020: GBP57.2m).
Adjusting items and discontinued operations
Adjusting items of GBP8.0m (2020: GBP4.4m) have been recognised
in the period relating to non-recurring items including wholesale
and licensing bad debt provisions of GBP0.4m, store and head office
restructuring costs of GBP0.9m, dilapidation costs of GBP1.0m,
right of use and fixed asset impairments of GBP5.1m and GBP0.6m of
refinancing costs in relation to securing the working capital
facilities. Discontinued operations in the prior period relate to
the closure of our Asian joint venture operation.
Balance sheet
The Group balance sheet at 31 January 2021 includes net assets
of GBP9.5m (2020: GBP29.1m) inclusive of closing net borrowings of
GBP(1.3)m (2020: net funds of GBP8.1m).
Inventory levels reduced to GBP23.7m (2020: GBP28.8m) largely
reflecting increased stock provisioning with regards to excess
Summer stock at the end of H1. However, concerted effort has been
made to reduce the H2 Winter season buy and to reassign a number of
Summer 20 lines to Summer 21 where appropriate.
Trade and other receivables have decreased to GBP17.9m (2020:
GBP19.5m) due to the contraction of wholesale orders as a direct
result of COVID-19 lockdowns. Trade and other payables have
remained broadly flat at GBP21.5m (GBP21.2m), despite the reduction
in Winter '20 and Summer '21 inventories, reflecting close cost
management and the extension of payment terms with landlords and
product suppliers through active negotiation.
FINANCIAL REVIEW (continued)
The right of use non-current asset, relating to the value-in-use
of future lease rentals has reduced to GBP6.6m (2020: GBP17.9m)
reflective of a contracting store portfolio and a current year
impairment of GBP4.9m (2020: GBP1.0m) recognised as a direct
consequence of the impact of COVID-19 on retail profitability.
Cash flow
Combined UK and US working capital facilities of GBP20m were
secured in the second half of the financial year to support the
Group's foreseeable future cash requirements.
The trading operations of the Group only utilised cash of
GBP(2.2)m (2020: cash generation of GBP5.7m) during the year,
despite reduced profitability as a result of the impact of
COVID-19, being reflective of tightly managed working capital
including negotiated supplier payment extension terms.
Cash outflows from investing activities of GBP1.3m (2020:
GBP2.2m) include capital expenditure of GBP0.2m (2020: GBP1.1m)
relating to ecommerce platform improvements and store and head
office restructuring costs of GBP1.1m (2020: GBP1.1m) relating to
the closure of seven stores as well as the targeted reduction in
operational and transactional staffing costs as a direct
consequence of the impact of COVID-19 on trading and cash resource.
Headcount has been reduced by 25% year-on-year. We continue to
target the closure of non-contributing stores and expect to close
more in the current year.
Cash inflows from financing activities of GBP0.5m (2020: outflow
of GBP(11.4)m) in the current year is inclusive of GBP6.5m of
working capital facility loans received net of GBP5.2m (2020:
11.4m) of IFRS 16 lease liability rental payments and interest
reflecting the negotiated rent discounts and deferrals achieved
during the year. In addition, GBP0.8m was expensed in the current
year with regards to securing the combined working capital
facilities and servicing the related debt interest.
Taxation
The total Group tax charge for the year was GBPNil (2020:
GBPNil). The Group has unused tax trading losses with a potential
value of GBP21.0m, of which GBP16.5m has not been recognised in
these financial statements. These tax losses can be utilised when
the Group returns to profitability.
Dividends
The Board of Directors remain of the view that the business is
best served by retaining current cash reserves to support the
turnaround of the business.
Brexit
The Group has implemented some in-house operational and
logistical changes in order to adapt to the post-Brexit trading
environment, in particular, with regards to the delivery of product
to EU wholesale and ecommerce customers. However, it is not
anticipated that this will have a significant impact on the Group's
future trading, although the changes come with some additional
costs.
COVID-19 Coronavirus
The full year results were significantly impacted by COVID-19
and the lockdown restrictions imposed during this period, both in
the UK and globally. Further details are presented in the COVID-19
statement.
Going Concern
In the prior year Annual Report for the year ending 31 January
2020, the Directors declared significant doubt about the ability of
the Group and parent company to continue as a going concern. This
was primarily due to uncertainty over whether funding could be
secured before the existing cash resources were eroded due to the
uncertainty on when normal trading would resume as a direct result
of the COVID-19 pandemic.
The strategic report describes the Group's and parent company's
financial position, cash flows and borrowing facilities as well as
principal risks and uncertainties facing the Group.
The Group secured a two-year GBP15 million asset based working
capital facility with Hilco Capital on 24 July 2020. Furthermore,
in December 2020, our US business secured additional funding of
$6.5m through the government sponsored Main Street Lending
Programme. The US loan, through Flushing Bank, Uniondale is for a
period of five years with repayments commencing from the end of the
third year.
Given the Group and parent company's new liquidity, together
with the actions being taken to optimise sales, tightly manage
costs and preserve cash, the Board is confident that the Group and
parent company are well positioned to navigate an extended period
of uncertain consumer demand, which will cover at least 12 months
from the date of approval of these financial statements and include
the forthcoming renewal of the UK credit facility in July 2022.
Although all scenarios discussed below are within the current
working capital facility available, the Directors acknowledge that
the UK facility expires in July 2022 and will need to be renewed or
alternative similar funding be secured. The Board is confident of
securing an extension of existing or similar funding beyond the
current expiration date. In assessing the renewal of the credit
facility in July 2022, the Directors have considered initial
discussions with the current financier; multiple options for
financing when initially sought; and the general economic
conditions and market's propensity to lend.
FINANCIAL REVIEW (continued)
As part of the Going Concern and Viability Statement review, the
Board has prepared and reviewed the FY22 detailed Budget and for
outer years FY23-FY26, the Long Range Plan. The FY22 Budget was
prepared on a detailed bottom-up basis and for the years FY23-FY26
on a more strategic high-level basis. The plan has been prepared by
each respective business channel: wholesale, retail, ecommerce and
licensing and by separate geographies: UK, North America and Rest
of the World.
A 'Base' Case budget has been prepared representing the scenario
management expects most likely to occur. Under this scenario, the
maximum borrowing position will be GBP11m over the next 12
months.
Within the Base Case, there is an assumed level of recovery in
FY22 versus FY21 across all revenue streams which is based on
management's current view of how we expect both French Connection
and the economy to recover once lockdown restrictions are lifted.
Where appropriate we have benchmarked FY22 Budget to FY20 levels,
noting that the Group's trading position will not reach FY20 levels
for some time and reflecting that trading conditions remain
significantly below pre-COVID 19 levels for the next 12 months. For
UK Retail, we have assumed all stores reopen from April 2021 and do
not assume any further lockdowns. In FY22 Wholesale is underpinned
by current order books for S21 season and current expectations of
W21 order based on initial conversations with customers. Ecommerce
has a less pronounced level of recovery as this revenue stream has
been the least impacted by the pandemic. For outer years in the LRP
from FY23, management have assumed more moderate levels of revenue
growth.
The base case budget has been further sensitised under two
additional scenarios: 'most likely worst case' and a 'reverse
stress test' which is based on a pre-defined outcome of the
business being no longer viable in which the borrowing requirements
exceed the current maximum facility occurring in November 2022.
Sensitivities have been performed on year-on-year turnover growth
rate assumptions, targeted gross margin %s, overhead growth/savings
and licensing growth. The most likely 'worst' case scenario
forecasts a net borrowing requirement that does not exceed the
maximum facility available over the five-year long range plan.
Under the 'most likely worst case' scenario, the Board believes
that the combined secured GBP20 million UK and US asset based
working capital facilities are expected to be sufficient to cover
the Company's foreseeable future cash requirements, which will
cover at least 12 months from the date of approval of these
financial statements.
The Board is also of the opinion that the current formal sale
process of the Company and its resulting outcome will not have any
impact on the availability of the existing working capital
facilities and therefore does not affect the going concern basis of
these financial statements.
Having undertaken a rigorous assessment of the financial
forecasts, particularly in the context of COVID-19 and their
assessment of high likelihood of renewal of the UK credit facility
in July 2022 as discussed above, the Board has therefore concluded
that it is appropriate to prepare the Group and parent company
financial statements on a going concern basis.
By order of the Board
Lee Williams
Chief Financial Officer
28 April 2021
Notes:
1. Underlying Operating result excludes adjusting items (Note 4) and discontinued operations.
2. LFL or "Like-for-Like" sales growth is defined as the
year-on-year sales growth for owned stores and concessions open
more than one year, including ecommerce revenues, removing the
impact of closed stores and reported in constant currency.
3. Constant Currency (CCY) is calculated by translating the year
ending January 2021 and January 2020 at a consistent rate to remove
the impact of exchange rate fluctuations.
4. Underlying overheads consist of LFL store overheads.
5. Adjusting items include provisions for bad debts, store and
head office restructuring expenditure, dilapidation costs,
impairment provisions and other professional fees (Note 4).
6. Continuing operations exclude the discontinued results from
the disposed Hong Kong and China joint ventures.
The Directors believe these measures are best reflective of how
the business is managed and are informative to shareholders in
understanding the performance of the business.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 January 2021
Year ended 31 January Year ended 31 January
2021 2020
Adjusting Adjusting
Before items Before items
adjusting and discontinued adjusting and discontinued
items operations* Total items operations* Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ---- ----------- ------------------ -------- ----------- ------------------ -------
Continuing operations
Revenue 2 71.5 - 71.5 119.9 - 119.9
Cost of sales (53.1) - (53.1) (74.0) - (74.0)
------------------------- ---- ----------- ------------------ -------- ----------- ------------------ -------
Gross profit 2 18.4 - 18.4 45.9 - 45.9
Operating expenses (32.7) (8.0) (40.7) (52.8) (4.4) (57.2)
Other operating income 3 3.9 - 3.9 5.5 - 5.5
Finance expense (1.3) - (1.3) (1.5) - (1.5)
------------------------- ---- ----------- ------------------ -------- ----------- ------------------ -------
Loss before taxation 4 (11.7) (8.0) (19.7) (2.9) (4.4) (7.3)
Taxation - - - - - -
------------------------- ---- ----------- ------------------ -------- ----------- ------------------ -------
Loss for the year from
continuing operations (11.7) (8.0) (19.7) (2.9) (4.4) (7.3)
------------------------- ---- ----------- ------------------ -------- ----------- ------------------ -------
Discontinued operations
Loss from discontinued
operations, net of tax - - - - (0.5) (0.5)
------------------------- ---- ----------- ------------------ -------- ----------- ------------------ -------
Loss for the year (11.7) (8.0) (19.7) (2.9) (4.9) (7.8)
------------------------- ---- ----------- ------------------ -------- ----------- ------------------ -------
* Adjusting items and discontinued operations (Note 4).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 January 2021
(continued)
2021 2020
Note GBPm GBPm
---------------------------------------------------- ------- -------- --------
Loss for the year (19.7) (7.8)
Other comprehensive income
Items that are or may be reclassified subsequently
to profit or loss
Currency translation differences for overseas
operations (0.3) (0.1)
Currency translation differences on foreign
currency loans, net of tax 0.4 (0.2)
Recycling of translation differences due to
disposal of discontinued operation - (0.7)
Other comprehensive income for the year,
net of tax 0.1 (1.0)
---------------------------------------------------- ------- -------- --------
Total comprehensive income for the year (19.6) (8.8)
Loss attributable to:
Equity holders of the Company (19.7) (7.9)
Non-controlling interests - 0.1
Loss for the year (19.7) (7.8)
Total comprehensive income attributable
to:
Equity holders of the Company (19.6) (8.9)
Non-controlling interests - 0.1
Total income and expense recognised for
the year (19.6) (8.8)
Losses per share
Basic and diluted losses per share 5 (20.4)p (8.2)p
Continuing operations
Basic and diluted losses per share 5 (20.4)p (7.7)p
Discontinued operations
Basic and diluted losses per share 5 - (0.5)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 January 2021
2021 2020
Note GBPm GBPm
------------------------------------- -------- ------ ------
Assets
Non-current assets
Intangible assets 0.2 0.2
Property, plant and equipment 1.0 2.0
Right-of-use asset 6.6 17.9
Deferred tax assets 4.5 4.5
Total non-current assets 12.3 24.6
Current assets
Inventories 23.7 28.8
Trade and other receivables 17.9 19.5
Cash and cash equivalents 6 5.2 8.1
Total current assets 46.8 56.4
Total assets 59.1 81.0
Non-current liabilities
Loans and borrowings 6 6.5 -
Lease liabilities 15.0 20.9
Provisions 7 0.7 0.3
Total non-current liabilities 22.2 21.2
Current liabilities
Trade and other payables 21.5 21.2
Lease liabilities 5.1 9.1
Provisions 7 0.8 0.4
Total current liabilities 27.4 30.7
Total liabilities 49.6 51.9
Net assets 9.5 29.1
Equity
Called-up share capital 1.0 1.0
Share premium account 9.8 9.8
Translation reserve 6.5 6.4
Retained (deficit)/earnings (7.9) 11.8
Total equity attributable to equity holders
of the Company 9.4 29.0
Non-controlling interests 0.1 0.1
Total equity 9.5 29.1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non-controlling
Share Share Translation Retained interests Total
capital premium reserve earnings Total GBPm equity
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ---------- ---------- -------------- ----------- --------- ---------------- ---------
Balance at 31 January
2019, as previously
reported 1.0 9.8 7.4 28.0 46.2 - 46.2
Impact of change in
accounting
policy of IFRS 16 (8.3) (8.3) (8.3)
Balance at 31 January
2019 1.0 9.8 7.4 19.7 37.9 - 37.9
(Loss)/profit for the
year ended 31 January
2020 (7.9) (7.9) 0.1 (7.8)
Other comprehensive
income
Currency translation
differences
for
overseas operations (0.1) (0.1) (0.1)
Currency translation
differences
on foreign currency
loans,
net of tax (0.2) (0.2) (0.2)
Disposal of discontinued
operations (0.7) (0.7) (0.7)
Balance at 31 January
2020 1.0 9.8 6.4 11.8 29.0 0.1 29.1
Loss for the year ended
31 January 2021 (19.7) (19.7) - (19.7)
Other comprehensive
income
Currency translation
differences
for
overseas operations (0.3) (0.3) (0.3)
Currency translation
differences
on foreign currency
loans,
net of tax 0.4 0.4 0.4
Balance at 31 January
2021 1.0 9.8 6.5 (7.9) 9.4 0.1 9.5
Share capital and premium reserve
Share capital is the nominal value of shares issued. Share
premium represents the difference between the amount subscribed for
shares and nominal value.
Translation reserve
The translation reserve comprises foreign currency differences
arising from the translation of the financial statements of foreign
operations as well as from the translation of foreign currency
loans. The translation reserve carried forward is net of GBP0.2m
(2020: GBP0.2m) deferred tax.
Retained earnings
Earnings available for distribution to shareholders under the
Companies Act 2006.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 January 2021
2021 2020
Note GBPm GBPm
--------------------------------------------------- ------ ------ ------
Operating activities
Loss for the period (19.7) (7.8)
Adjustments for:
Depreciation of property, plant and equipment 1.0 1.2
Depreciation of right-of-use asset 5.5 6.6
Rent concessions (1.1) -
Share of loss of joint ventures - 0.5
Finance expense 1.3 1.5
Adjusting items 4 8.0 4.4
Operating cash flows before changes in working
capital and provisions (5.0) 6.4
Decrease in inventories 2.8 1.6
Decrease in trade and other receivables 1.1 2.7
Decrease in trade and other payables (1.1) (5.0)
Cash flows from operations (2.2) 5.7
Income tax paid - (0.1)
Cash flows from operating activities (2.2) 5.6
Investing activities
Acquisition of property, plant and equipment (0.2) (1.1)
Net costs from store and head office restructuring (1.1) (1.1)
Cash flows from investing activities (1.3) (2.2)
Financing activities
Proceeds from working capital facilities
and loans 6 6.5 -
Payment of lease liabilities 6 (4.1) (9.9)
Interest paid on lease liabilities (1.1) (1.5)
Interest paid on loans (0.2) -
Refinancing costs (0.6) -
Cash flows from financing activities 0.5 (11.4)
Net decrease in cash and cash equivalents (3.0) (8.0)
Cash and cash equivalents at 1 February 8.1 16.2
Exchange rate fluctuations on cash held 0.1 (0.1)
Cash and cash equivalents at 31 January 6 5.2 8.1
Cash and cash equivalents 6 5.2 8.1
Bank loans 6(6.5) -
Net cash and borrowings at 31 January (1.3) 8.1
NOTES
1 Basis of preparation
Consolidated financial statements and accounting policies
The preliminary announcement for the year ended 31 January 2021
has been prepared in accordance with International Accounting
Standards in conformity with the requirements of Companies Act 2006
and they are prepared in accordance with International Financial
Reporting Standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union at 31 January 2021.
The annual financial information presented in the preliminary
announcement for the year ended 31 January 2021 is based on, and is
consistent with, that in the Group's audited Financial Statements
for the year ended 31 January 2021, and those Financial Statements
will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
These consolidated financial statements have been prepared using
the historical cost convention, modified for certain items carried
at fair value, as stated in the accounting policies.
Statutory accounts
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 January 2021 or
2020. The financial information for 31 January 2020 is derived from
the statutory accounts for 2020 which have been delivered to the
Registrar of Companies. The auditor has reported on the 2020
accounts; their report was (i) unqualified and (ii) did not contain
a statement under section 498 (2) or (3) of the Companies Act 2006.
However the report did include reference to material uncertainty
that may cast doubt on the Group and Parent Company's ability to
continue as a going concern due to the impact of COVID-19 on the
sector in which the Group operates. The audit opinion was not
modified in respect of this matter.
The statutory accounts for 2021 will be finalised on the basis
of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of
Companies and made available for viewing and download from the
Group's website at www.frenchconnection.com in due course. The
Annual Report will be circulated in printed form to shareholders in
the second week of June 2021.
NOTES
2 Operating segments
Segment revenue and results
2021 2020
Income Statement GBPm GBPm
------------------------------------ -------- --------
Revenue
Retail 22.5 46.7
Wholesale 49.0 73.2
Group revenue 71.5 119.9
Gross profit 18.4 45.9
Retail 32.9% 51.0%
Wholesale 22.4% 30.2%
Group gross margin 25.7% 38.3%
Underlying operating (loss)/profit
Retail (10.4) (10.0)
Wholesale 5.0 13.2
Licence income 3.9 5.5
Common and Group overheads (8.9) (10.1)
Finance expense (1.3) (1.5)
Underlying Group operating loss* (11.7) (2.9)
Underlying operating margin
Retail (46.2)% (21.4)%
Wholesale 10.2% 18.0%
Underlying Group operating margin (16.4)% (2.4)%
Geographical information
2021 2020
GBPm GBPm
------------------------------------ ------- -------
Revenue
UK/Europe 64.8% 64.7%
North America 33.8% 33.9%
Rest of the World 1.4% 1.4%
Divisional operating (loss)/profit
UK/Europe (5.8) (1.6)
North America 1.1 5.5
Rest of the World (0.9) (0.8)
Group overheads and finance income (6.1) (6.0)
Underlying Group operating loss* (11.7) (2.9)
* excludes adjusting items (Note 4) and discontinued
operations
NOTES
3 Other operating income
2021 2020
GBPm GBPm
------------------ ------ ------
Licensing income 3.9 5.5
4 Loss before taxation
Year Year
ended ended
31 Jan 31 Jan
2021 2020
Reconciliation of loss before tax to underlying GBPm GBPm
operating loss
-------------------------------------------------- ------- -------
Loss before tax (19.7) (7.8)
Adjusting items:
Provisions for bad debts and bad debt write-offs 0.4 1.0
Fixed asset impairments 0.2 0.4
Right of use asset impairment 4.9 1.0
Store and head office restructuring costs 0.9 0.9
Dilapidation costs 1.0 0.7
Other professional fees 0.6 0.4
8.0 4.4
-------------------------------------------------- ------- -------
Discontinued operations - 0.5
Underlying operating loss (11.7) (2.9)
-------------------------------------------------- ------- -------
Provisions for bad debts, net of VAT recoverable, of GBP0.4m
(2020: GBP1.0m) have been expensed in the period relating to unpaid
contractual debt due from wholesale export and licensing
customers.
Right of use asset impairment of GBP4.9m (2020: GBP1.0m) has
been expensed relating to UK/Europe stores whereby the future
contractual obligation costs exceed the economic benefits forecast
to be received. Current year charge of GBP0.9m (2020: GBP0.9m) has
been expensed in the period relating to store and head office
restructuring costs. Provisions for store disposal and dilapidation
costs of GBP1.0m (2020: GBP0.7m) have been recognised in the
period.
Other professional fees in the current year of GBP0.6m relate to
refinancing costs with regards to securing the working capital
facility. Prior year fees of GBP0.4m were in relation to the
conclusion of the Group strategic review.
NOTES
5 (Losses)/earnings per share
Basic and diluted (losses)/earnings per share are calculated on
96,612,634 (2020: 96,612,634) shares being the weighted average
number of ordinary shares during the year.
Basic and diluted losses per share of (20.4) pence per share
(2020: (8.2) pence) is based on losses of GBP(19.7)m (2020:
GBP(7.9)m) attributable to equity shareholders.
On continuing operations the basic losses per share of (20.4)
pence per share (2020: (7.7) pence) is based on losses of
GBP(19.7)m (2020: GBP(7.4)m) relating to continuing operations.
On discontinued operations the basic losses per share of GBPNil
pence per share (2020: (0.5) pence) is based on losses of GBPNil
(2020: GBP(0.5)m) relating to discontinued operations.
The reconciliation from basic and diluted losses per share to
adjusted losses per share is as follows:
2021 2020
2021 pence 2020 pence
GBPm per share GBPm per share
----------------------------- --------- ----------- -------- -----------
Loss attributable to equity
shareholders (19.7) (20.4)p (7.9) (8.2)p
Adjusting items (Note 4) 8.0 8.3p 4.4 4.6p
Discontinued operations - - 0.5 0.5p
Adjusted loss attributable
to equity shareholders (11.7) (12.1)p (3.0) (3.1)p
The adjusted losses per share relates to the underlying
operations and in the opinion of the Directors, gives a better
measure of the Group's underlying performance than the basic losses
per share
6 Analysis of net debt
Cash Non cash
1 February flow changes 31 January
2021 GBPm GBPm GBPm GBPm
--------------------------- ------------- ------ --------- -------------
Cash and cash equivalents 8.1 (3.0) 0.1 5.2
Loans - (6.5) - (6.5)
Lease liabilities (30.0) 4.1 5.8 (20.1)
Lease liabilities* - - (3.7) (3.7)
Net debt (21.9) (5.4) 2.2 (25.1)
*lease liabilities of GBP3.7m are reported within trade payables
at the year-end.
On 24 July 2020 the Group arranged a GBP15m UK working capital
facility with Hilco Capital for the next two years which is secured
against the assets of the UK business. As at 31 January 2021, the
loan drawdown was GBP1.8m (2020: GBPNil) which is all repayable
after more than one year. Interest is accrued at 7.5% per annum on
the loan repayable and 1.5% per annum on the unutilised
facility.
In December 2020, the Group arranged a $6.5m US credit facility
from Flushing Bank via the US federal government 'Main Street'
lending program. The loan is repayable over five years and is
secured against the assets of the US division. As at 31 January
2021, $6.5m (GBP4.7m) was repayable after more than one year.
Interest is accrued on the loan repayable at LIBOR plus 300 basis
points.
NOTES
7 Provisions
2021 2020
Dilapidations GBPm GBPm
-------------------------- ------ ------
Balance at 1 February 0.7 0.7
Utilised during the year (0.2) (0.7)
Charged during the year 1.0 0.7
Balance at 31 January 1.5 0.7
Current year provision relates to future dilapidation costs with
regards to contractual obligations to reinstate stores to their
original condition. The associated costs are forecast to be
incurred over the remaining lease period of the respective stores.
Total charge during the year has been expensed to adjusting items
(Note 4) within operating expenses in the income statement. Closing
provision of GBP1.5m (2020: GBP0.7m) includes non-current
liabilities due after more than one year of GBP0.7m (2020:
GBP0.3m).
In the prior year, provisions were recorded to reflect the
estimated committed closure costs of identified underperforming
retail stores including onerous leases whereby the future
contractual obligations exceeded the forecast economic benefits.
Onerous lease provision was reclassified to the right of use asset
on IFRS 16 transition.
8 COVID-19
The financial year witnessed extraordinary events caused by the
COVID-19 pandemic which has had a substantial impact on businesses
and on the fashion retail sector in particular.
On 11 March 2020, the World Health Organization declared
COVID-19 a pandemic. In line with Government advice from 18 March
all French Connection head office staff were encouraged to work
from home where this was possible. Our retail stores were closed on
Sunday 22 March 2020 and our concessions were closed on Monday 23
March 2020. These closures were not limited to the UK. All our
stores and concessions in Ireland, the Netherlands, Spain,
Portugal, France and the USA were closed and our operations in the
USA, Hong Kong, India, Turkey and Portugal were all restricted by
national government measures to contain the Coronavirus (COVID-19)
virus.
These closures and restrictions, together with the squeeze on
our wholesale business from customers who were initially in a
challenging financial position, led to a drastic reduction in our
daily cash income in a dramatically short period of time. The
economic impact of this global health crisis on the French
Connection Group, at a time when we were focused on doing all we
could to return our business to a sustainable level of
profitability, required significant action to secure the financial
stability of the business.
From 24 March 2020, we asked all store and concession staff to
accept the "furloughing" of their employment at a reduced level of
pay so that we could sign up to the UK Coronavirus Job Retention
Scheme and implemented similar measures in our retail operations
around the world.
In addition, from 7 April 2020, we asked those head office
staff, both in the UK and globally, who had a significant reduction
in their regular work load either due to the nature of their role,
or because they were unable to perform their role effectively
remotely to accept the "furloughing" of their employment and a
reduced level of pay.
Our ecommerce business continued to operate, initially at lower
levels to those before the outbreak although subsequently with
online sales significantly up. Our wholesale customers, in
particular, the 'bricks and mortar' customers were in a similar
position and revenues significantly declined. However, the impact
was mitigated by our large wholesale 'pure play' customer base
which continued to trade, and in some cases, trade strongly.
We worked hard planning for the stores to reopen, ensuring they
did so safely and in line with all Government guidance. The
majority of the stores opened from mid-June and we ensured that our
customers and colleagues were able to shop and work confidently in
a safe and healthy environment. However, when stores did reopen we
saw that our smaller stores in more provincial locations performed
more strongly than those in the traditionally bustling city
centres. Trading at the beginning of the second half of the year
was in line with our expectations, however, as a consequence of the
subsequent tightening of COVID-19 guidance from September, footfall
declined again and conditions became more difficult across the
retail channels. This was then compounded by the full closure
required during the second lock down in November and the subsequent
third lock down at the start of January 2021.
We once again worked hard, planning for our stores to reopen
from mid-April 2021.
NOTES
8 COVID-19 (continued)
As a direct consequence of the above, we enacted some of the
following to safeguard the continued future of the Company and
ensure that the business remains a going concern.
- Furloughing of all global retail staff and a substantial
proportion of global head office employees whose workload had been
significantly impacted. We registered for applicable national
schemes to enable us to recoup employment salaries and taxes where
applicable.
- Liaising with our retail, office and warehouse landlords with
regards to the attainment of rent payment holidays. We are in
continued discussions about the payment arrangements of future rent
quarter payments and the settlement profile of these deferred
amounts.
- Discussions with suppliers regarding renegotiations of existing payment terms.
- Dialogue with key wholesale customers, including agreement on
early payment settlement discounts to ensure continued wholesale
revenue cash income.
- Correspondence with the relevant government authorities to
defer any local or national taxes due, including business rates,
duty, employment and VAT related taxes.
All of the above factors have had a significant impact on the
short-term cash income stream of the business. In the light of the
Company's cash position and the continued expected weak trading
environment, we were in active discussions with a number of
potential funding partners. On 24 July the Group put in place a
GBP15 million working capital facility with Hilco Capital for the
next 2 years. In addition, our US business, based in New York
secured US$6.5million of additional funding through the government
backed Main Street Lending Programme to support our US based
operations and employees. The US loan is for a period of 5 years
with repayments commencing from the end of the 3rd year. The
Directors expect these new funding facilities to be sufficient to
cover the Company's cash requirements, based on its current
conservative expectations of future trade.
The Company will continue to tightly manage its cost base over
the coming months and we await better visibility on the speed of
the recovery of demand across the different business channels and
territories. Although the stores recently reopened, we can only
estimate how quickly and to what extent store footfall and
therefore sales will recover. This will also impact the rate of
improvement within the wholesale channel, though our forward orders
are strong.
Given the Company's new liquidity, together with the actions
being taken to optimise sales, tightly manage costs and preserve
cash, the Board is confident that the Company is well positioned to
continue to navigate an extended period of uncertain consumer
demand.
The welfare, health and safety of our stakeholders, and in
particular our colleagues and our customers, has been our top
priority, while taking decisive actions to protect the business and
its long-term financial position.
NOTES
9 Retail locations
31 January 2021 31 January 2020
Locations sq ft Locations sq ft
------------------------------------------- ---------- -------- ---------- --------
Operated locations
UK/Europe
French Connection Stores 26 71,385 31 79,768
French Connection/Great
Plains Concessions 38 35,097 45 40,418
YMC Stores 3 1,805 3 1,805
67 108,287 79 121,991
North America
French Connection
US Stores - - 2 9,102
Total operated locations 67 108,287 81 131,093
French Connection licensed and
franchised
UK/Europe 1 1,100 2 2,553
North America 1 2,346 1 2,346
Middle East 2 1,614 7 11,678
Australia 146 70,282 148 75,013
Other 11 10,802 15 11,446
Total licensed and franchised
locations 161 86,144 173 103,036
Total branded locations 228 194,431 254 234,129
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FR FDLLLFZLFBBD
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