French Connection may run out of cash in the coming months

The popular British brand French Connection is finding itself in tough waters during these tough times.

As it was forced to close all 68 stores in the UK in addition to many overseas in order to prevent the coronavirus from spreading, the retailer has revealed it does not have enough cash to survive more than the next few months.

French Connection is now looking for a cash injection and is in talks with potential investors and the conversations seem to be boding well, according to a statement by the company.

Although online sales for the business have seen a 44 per cent jump over the past 6 weeks and some wholesale vendors in Europe have continued to place orders, it is not enough to keep the company afloat.

Many wholesale vendors in USA have stalled payments for stock supplied and should the “current COVID-impacted trading levels continue, the company’s cash resources will eventually be eroded in the coming months.”

Some of French Connection’s stores in Europe and other parts of the world are reopening as relaxations come into place, with the stores in UK lined up to open on 1 June.

To date, 90 per cent of 780 employees at the company have been furloughed and other steps have been undertaken so far to preserve cash. French Connection was negotiating with landlords for waiving rents or deferrals, asking suppliers for discounts and rescheduling tax payments in the UK.