Last week saw news of declining fortunes at major retail groups with French Connection showing a £20 million drop in profits and House of Fraser showing a 3.9% decline in like for like sales. Footfall continues to falter.
French Connection profits fell by £20 million last year and any rapid turn round looks remote after the fashion chain warned there is no quick fix for its trading problems.
Shares in the group slipped 4p to 248p on the troubles that were flagged in a profit warning in December.
After stripping out gains from the sale of a property, full year profits finished at £12.2 million compared with £33.7 million the previous year. Sales were 7% down at £246 million.
Broker Numis says stakebuilding by Icelandic retailer Baugur is ‘the only thing that is holding the share price up at these levels.’
Chairman and major shareholder Stephen Marks said 2005 ‘was the most difficult we have experienced for a considerable period of time.’
Up market department store chain House of Fraser suffered a 3.9% decline in like-for-like sales in 2005, but thinks it had a good year given the grim trading environment.
Although it says the first half of the current year will be difficult, sales in the first seven weeks improved, and at 1.3% down on a like-for-like basis are better than the management expected with higher gross margins.
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