French Connection has received £15 million from firm Hilco Capital to help it mitigate the financial impact of the coronavirus pandemic. The fashion retailer said the working capital facility with Hilco Capital is for the next two years.
The brand said the amount “will be sufficient to cover the company’s cash requirements, based on its current conservative expectations of future trade”.
It expected its current net cash position to reduce in the coming months, as it pays its dues to the HMRC, landlords and suppliers after they were deferred amid the lockdown. The retailer added it was not eligible for government-backed financing schemes during the coronavirus lockdown.
“We are seeing sales volumes grow week on week, as further relaxation of the lockdown continues, however, we anticipate this to be a gradual process, especially in larger cities,” French Connection said.
“Although the stores have reopened, with appropriate increased hygiene and social-distancing measures in place to keep colleagues and customers safe, it is too early to predict how quickly and to what extent store footfall and therefore sales will recover,” French Connection said. It further added, “This will also impact the rate of improvement within the wholesale channel. Given the company’s new liquidity, together with the actions being taken to optimise sales, tightly manage costs and preserve cash, the board is confident that the company is well-positioned to navigate an extended period of uncertain consumer demand.”