British fashion retailer French Connection has today recorded a pre-tax loss of £7.2 million for its full financial year following a profit of £4.6 million a year earlier.
Revenue plummeted eight per cent to £197.3 million in the year to January 31st 2013 as the retailer continues to struggle amid falling demand, while total and like-for-like sales in the UK & Europe division declined by seven per cent.
Last September, French Connection announced a set of initiatives aimed at rejuvenating its ailing operations including developing its product offering, improving merchandise management, and disposing of loss-making stores.
Citing “a very difficult property market”, the chain closed two stores in the UK/Europe over the period and three stores in North America and outlined plans for the closure of a further three stores and six concessions during the coming year, while rent negotiations with landlords continue.
However, the retailer remains positive about its position, with French Connection Chairman and CEO Stephen Marks commenting: “After a difficult trading year, I am pleased to be able to tell you about the changes we have made in our business.
“Many of the initiatives we have taken are beginning to show interesting results and while it is still early days, we see some good progress and feel that we are moving in the right direction.
Strengthening its management team has been another key part of French Connection’s strategy, with new senior appointments to the Design team, Multichannel and Production teams over the year, though Anusha Couttigane, Consultant at analyst firm Conlumino, believes that more must be done to modernise the retailer’s image.
“Collections are simply not compelling enough to inspire big spending and this has led to it losing ground in the upper middle market,” Couttigane said.
“Whilst ten years ago the FCUK brand was synonymous with forward-thinking fashion, today French Connection seems to have lost much of its aesthetic definition.
“Neither crisp and edgy like Cos nor classic and understated like Reiss, there is little by way of unique design qualities that the brand can use to justify its premium price tags.
“The lack of distinction has disillusioned consumers who expect to extract more exclusivity in terms of style.
“Whilst competitors, such as Whistles, have reinvented themselves as a leader in fashion-led retailing, French Connection has become less and less conspicuous on the high street.”
However, the chain is hoping to reinvent itself by building its digital operations, which Couttigane described as a “positive move” with the launch of its ‘Make A Scene’ competition.
Website users are invited to make a film using pre-recorded scenes featuring actors in the label’s clothes in a bid to raise its online profile and boost customer interaction with the brand.
Marks concluded: “The initiatives we have taken have resulted in some major changes and are progressing well.
“The changes will help provide a new impetus to sales growth in both the retail and wholesale businesses.”