It experienced exceptional sales growth from the late 1990s on the back of the controversial FCUK advertising campaign until 2003/04, when it dramatically ran out of steam.

It experienced exceptional sales growth from the late 1990s on the back of the controversial FCUK advertising campaign until 2003/04, when it dramatically ran out of steam. UK retail sales had grown threefold in just five years, but in 2010/11 they were the same as seven years earlier.

Retail Week Knowledge Bank’s profile charts management’s attempts to reignite forward momentum, but it has been an uphill battle across the group spectrum. French Connection also has major wholesale and international retail interests, plus sub-brands Toast, Great Plains and YMC, although Nicole Farhi was sold in 2010. UK and European retailing still accounts for over 50% of sales. However, management has increasingly been emphasising its various wholesale and international operations in plans to revive fortunes, including in its recent 2011/12 interim results.

In contrast, few significant solutions have been offered for its core domestic retail operation, apart from commenting there is work to be done on retail densities – Retail Week Knowledge Bank calculates they have fallen from over £550 per sq ft to £350 per sq ft – while it is proving difficult to rejig the store portfolio.

There is not just much to be done on densities. Retail Week Knowledge Bank notes employment costs exceed 20%
of sales when only 60% of turnover is attributable to staff-intensive retailing, while sales per employee have plummeted and not recovered.

Worryingly, in these latest interim results gross margins are sharply down. Less tangibly, Retail Week Knowledge Bank has been concerned for a while that French Connection’s prices seem “expensive” against the competition, while the offer now appears less appealing to younger buyers, the coming core target grouping.

After a reasonable spring, sales waned until “very strong demand” in the heavily discounted end-of-season summer Sales – is this not the thin end of a pricing, fashion and target marketing wedge, competitive market conditions notwithstanding?