FASHION retailer French Connection has warned it’s going to quickly run out of money on account of coronavirus until it will get further help.
A possible collapse would have an effect on French Connection’s 780 employees members working throughout its 76 UK shops and concessions.
⚠️ Learn our coronavirus live blog for the newest information & updates
French Connection has warned it could quickly run out of money until it will get further helpCredit score: Reuters
The retailer warned in a buying and selling assertion that until it secures new funding or gross sales enhance, it expects its money sources to be “eroded” over the approaching months.
French Connection mentioned it has seen “a major discount” in gross sales after it was pressured to shut its UK shops in March on account of coronavirus lockdown.
On-line gross sales have risen 44 per cent previously six weeks, however this solely makes up a small proportion of the enterprise, it added.
French Connection mentioned that accessing authorities funding to help the enterprise through the pandemic has been “difficult” as a result of tight eligibility standards.
CORONAVIRUS CRISIS – STAY IN THE KNOW
Do not miss the newest information and figures – and important recommendation for you and your loved ones.
To date, the retailer has efficiently utilized for the coronavirus job retention scheme and enterprise charges aid.
In consequence, French Connection is now in talks with potential companions for pressing funding.
The retailer mentioned it is assured of elevating ample funds to help the enterprise till buying and selling improved.
But it added: “With out securing extra funding and may the present Covid impacted buying and selling ranges proceed, the corporate’s money sources will ultimately be eroded within the coming months.”
French Connection mentioned it plans to reopen shops from June 1, in keeping with authorities steering and in a “orderly method” to guard employees and buyers.
The struggling retailer, famed for its FCUK slogan, reported a £7.3million annual pre-tax loss within the 12 months to January 31, 2020.
Its money reserves additionally halved from £16.2million to £8.1million throughout the identical interval.
The retailer is the newest one to report difficulties following the coronavirus disaster, with half of chains facing administration by the end of the summer.
Debenhams has revealed 16 of its UK shops won’t reopen as soon as lockdown is eased.
Whereas trend retailer Animal plans to shut all 21 UK stores, placing 500 jobs in danger.
In October 2018, struggling French Connection confirmed it could be sold.
A 12 months earlier, Sports activities Direct boss Mike Ashley paid £4million for 10.7million shares in the fashion chain.
Shareholders have additionally previously demanded French Connection “should be broken up” after a number of annual losses.
