Reporting a hefty loss this week, French Connection boss Stephen Marks said the business was starting to respond to a revived strategy. But does French Connection have what it takes to turn the business around? Drapers Debates…
Yes - Victoria Gallagher
The French Connection name is a staple of the high street and has a great heritage behind it, with more than 40 years of history. Since being founded in 1972 the retailer has already been through several reincarnations, from the cheeky FCUK branded T-shirts of the 1990s to the go-to high street store for party dresses in the noughties.
I have every confidence that it can once again go through another change and re-emerge a leaner machine.
Some people have been very quick to say there is no way the chain will be able to swing back into profit, but people are writing them off too early. They have laid out a strategy to improve their UK retail arm and it will take time for this to take effect. You can’t wave a magic wand and expect sales to suddenly come flooding back.
The chain has been planning for the future and among other initiatives French Connection has enlisted a new design team and is limiting discounting - two clear moves that the retailer is learning from any mistakes it may have made in the past.
When announcing this week’s results French Connection said that despite making a loss it maintained a strong net cash position. It has no debt and in the year to January 31, 2013 the retailer had closing net cash of £28.5m. Without the burden of debt hanging over it the chain should be able to buckle up and reverse back into healthier times.
French Connection is arguably one of the most recognisable retail names on the British high street and therefore will win favour with consumers if the product is right.
With chairman and chief executive Stephen Marks and his team plotting the retailer’s road to recovery I hope that premium chain remains a firm figure of our future retail horizon.
No - Ruth Faulkner
A quick glance on French Connection’s website and you will find 1092 womenswear items and 476 menswear items all on Sale.
The premium retailer has become synonymous with Sales in recent years, with both the stores and the website offering items at a significant discount. No doubt this is part of the story behind the £7.2m loss French Connection announced this week, but it also hints at the difficulties the retailer will have in turning the business around.
The loss comes on the back of two decent profit-making years – it reported profits of £4.6m last year and £7.3m the year before.
But French Connection is not the business it once was. The over-use of the famed FCUK slogan in the late 90s and early 2000s now sees to have been to its detriment. Despite its popularity at the time, the slogan appealed to a very different demographic to its premium heartland, and having flooded the market with eye-catching T-shirts, the cold core has been put off.
Despite scaling back the visible use of its FCUK logo in 2009, the message that French Connection is a more premium fashion-forward retailer doesn’t seem to have caught up with the consumer.
There are also issues with quality – as one supplier recently told me: “French Connection’s prices are high but the fabric they use isn’t what it once was and I think customers can tell that.”
Not only does it need to re-educate its customers to buy garments at full-price and not in one of its many Sales, but it also needs to speak to new customers, letting them know what the brand stands for, all the while ensuring that the price it is asking is representative of what is being delivered.
A long way to go? Definitely. Achievable? I am not so sure.