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French Connection admits "We haven't done as well as we should have"

French Connection is to commit 20% more budget to in season buying, admitting it has “not done as well as we should have”.

The high street retailer announced a raft of initiatives in a bid to revive its UK retail business after falling into the red in the first half of the year.

The company made a £6.3m loss compared to a £700,000 profit for the same period last year. In the six months to July 31 revenue dropped 7% to £96.0m from £102.8m in the same period last year.

Chief operating officer Neil Williams said: “The UK retail high street is tough, and on top of that we haven’t done as well as we should have done.”

Buying patterns will change, with an additional 20% being allocated to the in-season budget, reducing the usual 50% budget dedicated to forward orders to 30%.

“We’ll be committing to less product in advance and then working hard to add things in season,” Williams explained.

French Connection will be working with its factories around the world to ensure flexibility to help the retailer improve its reaction speed to bestselling lines and changing trends

“Our intention is by managing the buy better during the season we can mark down less during the Sale and also have a shorter Sale,” said Williams, a tacit acknowledgment of the effect discounting had on gross margins, which fell by 2.3% to 47.7%.

French Connection will also look to reduce prices although Williams could not specify by how much this would be as it would alter across the range. “Prices went up as commodity prices went up and so they will be dropping down again to realign themselves.”

Williams said the bulk of the range would be  in its “sweet spot” price point, although any change would not be “obvious”.

Some initiatives have already been put in place to improve both the range and buying at French Connection as well as a raft of senior appointments.A new head of womenswear design was appointed three months ago. Although Williams refused to name her he added that she was previously a head designer at the Unique range at Topshop.

“She shows how to put a collection together and has an element of the fashion forward approach,” said Williams.

French Connection has also appointed Sam Donoghue, former vice president of Rugby and RRL Europe at Ralph Lauren, in a newly created role, head of UK retail.

The retailer also plans to implement click and collect services across its retail portfolio in November in time for the festive period.

“For us [Christmas] is an opportunity because we didn’t do particularly well last year. Marketwise, I can’t see things changing though,” said Williams.

Readers' comments (1)

  • Unfortunately, French Connection has been producing expensive clothes that no-one wants for a while. I am one of many customers who have struggled to find something I really like in the shop for several seasons. This means they have lost contact with their core customer and what they want to buy.

    They need to take a leaf out of Zara’s book and invest properly in merchandising. Great merchandising processes will help them focus on buying what their customer wants whilst handling their commitment in a way that means they sell more product at full price. Win win for everyone.

    They aren’t alone though. In a recent survey we ran, more than half of retailers said they typically discount at least 10-24% of their stock, a clear sign that many are reading the market poorly, are confused about what their customers are looking for and unable to correct buying mistakes earlier.

    The good news is there are ways in which these retailers can turn the situation around and build a positive future. The first is to ditch whatever is passing for their current merchandising processes, probably together with their expensive and aging old software systems. Moving to software and processes that recognise the marketplace as it is now whilst helping to reduce overheads is key. This will improve their purchasing decisions, cut the volume of discounted goods and reduce the risks associated with stock buying.

    Christina Grzasko, Managing Director, Anya Media

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