French Connection, the fashion retailer, has secured additional funding of $6.5 million through the US government’s Main Street Lending Program to support its US business. The loan will provide working capital for French Connection’s wholesale operation in New York. It is important to note that this funding does not necessarily indicate that the business was facing dire financial challenges. Rather, it reflects the company’s need for significant working capital during certain times of the year to operate effectively.

The funding comes in the form of a five-year loan, with repayment starting at the end of the third year. This gives French Connection ample time to utilize the capital and stabilize its operations. The company’s trading performance has been impacted by lockdowns in its core markets, leading to a decline in sales. However, French Connection’s e-commerce channels have performed well, experiencing strong sales despite offering fewer discounts compared to the previous year.

Since the reopening of stores in England on December 2, trade has shown signs of improvement, although the tightening of Covid-19 guidelines and the second lockdown in November presented challenges. On a positive note, French Connection’s wholesale business has exceeded expectations, with major online customers trading consistently and placing orders for Spring 2021.

Despite these positive developments, French Connection acknowledges that significant challenges lie ahead. The ongoing impact of Covid-19 and the uncertainty surrounding Brexit are expected to affect business operations. However, the company remains confident in its ability to adapt and capitalize on any opportunities that may arise.

The latest funding package and positive trading updates from French Connection highlight the company’s determination to navigate through challenging market conditions. The funding will provide support and stability as French Connection aims to ensure the sustainability and growth of its business.

Useful links:
1. French Connection Official Website
2. US Main Street Lending Program