French Connection’s hopes of getting back in the black dashed by profit warning

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The retailer was tight-lipped about the reasons behind the collapse, only saying that its retail division’s sales will be “materially lower than expected”.

Analysts instantly switched their predictions of a £500,000 profit next year to expectations of a £3.5 million loss. The company last month revealed a full-year pre-tax loss of £800,000.

Retail analyst Freddie George at Cantor Fitzgerald called the warning “very disappointing” and suggested that the problems were down to weaker ranges in its stores.

 

He added: “Last year, the ranges looked a lot brighter — they had a lot of strong accessories and shoes — but that’s not there now.

“It has not been a great first quarter in the retail sector. Generally, apparel fashion has been weak in the first quarter and my hunch is that people are saying ‘we’ll buy a car, or do a bit on the house… instead of (spending on) fashion.’”

He said some of the problems could be down to founder and chief executive Stephen Marks: “He signs everything off but he’s just one person. You can get it right sometimes but you can also get it wrong.”

Source Article from http://www.standard.co.uk/business/business-news/french-connections-hopes-of-getting-back-in-the-black-dashed-by-profit-warning-10200745.html

April 24, 2015 |
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