French Connection has announced that its New York-based US business has secured 6.5 million dollars of additional funding through the Main Street Lending Programme.
The loan is for a period of five years with repayments starting from the end of the third year.
The company said its US business, being predominantly wholesale, requires a “significant amount of working capital at certain times of the year to operate, which this will provide”.
In the same update, French Connection said trading in its home UK market in the early part of H2 is in line with expectations. However, footfall has declined due to the tightening of Covid-19 restrictions in September, further compounded by new lockdowns in November.
But trading has been “encouraging” since the reopening of stores in England and Wales on Wednesday 2 December.
French Connection upbeat on current trading
The retailer also said its ecommerce channels have continued to trade positively even though it has adopted a less promotional stance during the period than last year.
Its wholesale operations have also performed well with its major online customers continuing to trade and take deliveries throughout the period and its Spring 21 orders ahead of expectations.
For the six months to 31 July, French Connection reported a 53.1 percent dive in group revenue to 23.9 million pounds.
Retail revenue declined by 57.6 percent to 10.1 million pounds with both UK/Europe and North America sales significantly impacted by Covid-19 store lockdowns.
The retailer’s underlying loss widened from 3.6 million pounds in 2019 to 12.2 million pounds this year.
Commenting on the results, French Connection chairman and chief executive Stephen Marks said: “Despite the unprecedented difficulties we continue to face alongside the rest of the High Street, having been able to secure the necessary financing we feel that we are well positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise especially given the good performance of wholesale, while maintaining a very tight control of costs.”
Photo credit: French Connection, Facebook