French Connection (FCCN) – Christmas lights are shining on the retailer, but why update now?
The trading update from the beleaguered retailer, which is a shadow of its former self, brought much joy and a nice bounce from the share price which is now up over 70% from the Oct 2015 lows. Although we are a little surprised why the update is issued before the results of the key Christmas trading period are known. However, if the store portfolio rationalisation continues and licensing revenue grows there could be big upside from this one!
The trading update covered the 16 week period ended 21st November 2015 which is before the end of the key trading period and seemingly contrary to the timing of updates in prior years. Sales of the French Connection Winter 15 collection have continued to be strong during the period after the promising start to the season, highlighted at the time of the interim results announcement in September. The LFL for UK/Europe retail for the period was 0.2% (2014: -6.1%) and within that the full price LFL remained around 6.0%. In addition the gross margin achieved during the period has increased…