French Connection (LSE: FCCN) posts a half-time loss and passes on its interim dividend.
Times are tough at French Connection (LSE: FCCN). After a brief resurgence in its share price last year, the clothing retailer has found 2012 to be much more of a struggle.
Its sales for the last six months slipped 7% to £96m, and this reversed a £0.7m profit this time last year into a £6.3m loss. It's the retail side of the business that is struggling the most, while wholesale and particularly brand licencing are performing much better.
Of course, French Connection is well aware of its problems on the retail side. It's been accused of selling the wrong clothes at the wrong prices in somewhat shabby stores. Today the company commented:
"In March we announced our intention to undertake an extensive review of the UK retail business. This review has been successfully completed and has resulted in a broad range of significant initiatives details of which we are announcing today. We expect that our initiatives will have a growing positive impact on our trading performance over the next two financial years."
So if even if the turnaround is successful, we're not looking at quick fixes here. Although French Connection does have a reasonable cash position, with £21m in the bank at the end of June, it's obviously not feeling too flush, as it has passed on its interim dividend. Last year it paid out a total of £1.5m in dividends.
There was no word on current trading, but French Connection said it wasn't expecting any improvement in the second half of the year. The shares plunged below 20p in early trading, but having recovered since, and are currently 7% off for the day at 23p, valuing the company at a smidgen over £20m.
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> Stuart does not own any shares discussed above.