French Connection posts £10.5 million loss as boss Stephen Marks hits out at retail rents
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Stephen Marks, the chairman and founder of French Connection, has attacked the obstinacy of landlords and punitive retail rents after the fashion chain posted a painful annual loss of more than £10 million.
French Connection had tried to offload 15 underperforming stores in the UK but has only exited three so far.
Marks, who is also its chief executive, said: “The difficulty is that the one thing we have maintained is the cash and when landlords look at our balance sheet they see a strong company.
“They say, ‘these guys are going to pay their money so why should we help them?’”
Despite its weak performance, French Connection ended last year with a cash pile of £28.5 million and no debt. Asked about Chancellor George Osborne helping retailers in next week’s Budget, Marks said: “[He should] have a look at the upward-only rental situation, which is absurd.”
The group posted a £10.5 million loss over the year to January 31. It was dragged down by a 7% fall in like-for-like sales in the UK, costs of £1.3 million from exiting stores and a £2 million writedown on the value of domestic shops.
It axes its dividend but hailed a “better performance” in the UK this year after a positive response to its spring ranges.
Marks touted a “robust” showing in the United States and it continues rapidly to expand its operations in India and China via partners in those countries.
Shares in French Connection rose by 1.2p, or 5%, to 25.7p.