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French Connection says could run out of cash within months
[BENGALURU] British retailer French Connection Group Plc warned on Tuesday it could run short on cash to operate its business in the coming months without additional access to capital, soon after it abandoned plans to sell the business after a more than year long review.
The retailer, once known for its provocative FCUK brand of clothing and accessories, said it was in talks with several potential partners over new funding.
The company said it does not expect to return to normal levels of trade for some time as its stores were forced shut due to the virus outbreak, but added it was planning to open them up in an orderly manner from June.
French Connection said it was in talks with suppliers, landlords and factories in a bid to cut costs given a significant drop in sales.
The company said it tried to participate in as many of the government's support initiatives as possible, including the job retention and store portfolio rates relief schemes that are in place now.
"It has however proved very challenging ... to access any other Government funds due to the tight qualification constraints that have been imposed and to date we have been unable to access any further funding from these schemes," French Connection said.
The retailer, whose brands include Great Plains and YMC, has struggled to differentiate itself from rivals such as Inditex's Zara, which offers a greater variety of clothes at lower prices.
French Connection said its online sales in the UK and the United States were up 44 per cent over the last 6 weeks and it has started to see a small increase in activity in Europe as countries begin to open up.