French Connection, Laura Ashley and Next all disclosed their
year-end results last month, and all said they were hit by or
expect to feel the pinch of a general downturn in consumer
spending.
Apparel retailer French Connection was particularly harsh on
itself, telling the City that its results were “not good
enough”. Chairman Stephen Marks said in a statement,
“Our financial results for the last year did not progress
as we would have liked, having been impacted by a marked
softening of the retail environment in both the UK and US towards
the end of the year.” The company posted a 22.5-per cent
drop in profits, from £4 million in 2007 to £3.1
million in the year to 31st January 2008.
French Connection’s mail order divisions are performing fairly
well, however. Upscale fashion and accessories cataloguer Toast
“bounced back very effectively” from a difficult
spring/summer 2007 with a strong response to its new homeware
selection. Further investment will be made in 2008, which is
likely to include a move to large warehouse facilities and a
strengthening of the management team. The French Connection
brand’s direct business is also generating a “healthy
turnover”.
Laura Ashley delivered a 62.3 per cent jump in pretax profits, to
£19.8 million for the fiscal year ended 26 January 2008.
Sales in the eCommerce and mail order division were up a modest 1
per cent, contributing to a UK sales rise of 7.2 per cent, to
£187.2 million. The direct division now represents 11
per cent of total UK retail sales.
Over at Next, the mail order business was the prime source of
growth. Sales at Next Directory increased by 3.3 per cent for the
year ended January 2008, and Directory profit was up 14.3
per cent. Overall Next increased operating profit by 5.8 per cent,
to £537.1 million on revenues of £3.33 billion. It
expects the Directory side of the business to grow by up to 2
per cent this year but told the City it was “difficult to
forecast” performance due to the “contradictory
market trends” growth of the internet and new opportunities
for Next to move into selling non-Next-branded product versus
pressure on consumer spending and increased competition.
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