Fashion
UK brand French Connection expects cash resources to erode
21 May `20
2 min read
UK-based fashion brand French Connection recently announced it expects its cash resources to erode over the next few months if it does not secure urgent funding. Accessing government funding to support the business amid the COVID-19 crisis has been ‘challenging’ and so far it has only received the Job Retention Scheme for its staff and a year’s business rates relief for the store portfolio, it said.
If trading conditions continue as they are and it is unable to access further funding, its cash sources would deplete over the coming months, it warned. Its board, however, expressed confidence the brand would secure enough funds to support the business until trading levels return to normal, according to British media reports. The steps taken by the retailer to preserve cash amid the crisis includes agreeing payment terms with suppliers, reducing orders numbers with factories, negotiating with landlords on possible rent holidays and rescheduling payments due to Her Majesty's Revenue and Customs. However, French Connection also reported that its online sales in the United Kingdom and the United States were up 44 per cent over the last six weeks, and that it was still supplying a few of the predominantly online wholesale customers that are still trading during the lockdown. The retailer also plans to reopen stores from June 1, in line with government guidance and in a ‘orderly manner’ to protect staff and shoppers.
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