UK fashion retailer French Connection has reported negative like-for-like sales, 13 store closures and declining eCommerce sales, closing the year with group sales down 8 per cent to £164.2 million.

Retail revenue declined by £10.9 million to £92.4 million, gross margin dropped by 0.4 percentage points to 46.3 per cent and its underlying operating loss ballooned to £4.7 million from £800,000 last year. The red ink was primarily due to large losses in the retail division – £15.6 million compared to £11.4 million in 2015 – rather than wholesale.

French Connection reported that the proportion of online sales remained unchanged from 2015 at 23 per cent. Given the decline in total sales, this means a sales decline of £2.5 million in its online business.

French Connection was at pains to emphasise that the year’s negative performance was primarily due to its disastrous first half, and that the second half showed signs of a turnaround. The label’s Autumn/Winter collection proved more popular than its Spring/Summer one and, alongside changes to instore design and merchandising, this benefited its full price sales performance and supported its strategy to reduce the level of discounting and promotions.

The appointment of Lee Williams (formerly of Asos and Waterstones) as group finance director, should help the troubled retailer address its operating costs and restructuring, but French Connection is a long way off from announcing a recovery, with poor product at the heart of its problems.

Product must be more consistent – both in design and quality – to sustain the minimal gains it made in the second half year. Ranges must be differentiated and price points must provide value for money, otherwise the mid-market will continue to steal footfall and market share.

• Nivindya Sharma is an analyst at Verdict Retail.