French Connection expects to break even by the end of its financial year 2014/ 2015 after this morning revealing a series of measures aimed at turning the struggling business around.
The fashion retailer has also appointed Simon Donoghue as its first UK head of retail to lead the turnaround. He joins from luxury lifestyle brand Ralph Lauren, where he was vice-president of the Rugby and RRL brands in Europe.
Speaking as French Connection revealed a pre-tax loss of £6.3m for the six months to July 31, chief operating officer Neil Williams said it hoped to see momentum building from spring 2013 but that it would take two year for the strategy to fully pay off.
The turnaround plan includes the closure of 15 loss-making stores from its 71-strong portfolio. Williams said it is in on-going talks with landlords but he added that it is not a simple process and it will “take as long as it takes” to get out of the leases.
French Connection is also reviewing product and range assortment, and has appointed a new head of womenswear design. “One thing that came out of the review is that we have amazing awareness and a huge following but that is not currently matched by the product,” Williams told Retail Week.
Williams added that there may be “some reduction” in prices as part of that review. “Prices may have drifted up on the back of cost increases, such as cotton prices. We need prices to be in the right sweet spot.”
It will continue to develop its e-commerce business over the second half after seeing a 23% rise in sales through the channel in the first half. From this week, online customers can return product to stores and, by the beginning of November, it will offer Click ‘n’ Collect.
It is also expanding its homewares collection after signing a licensing deal with “one of the UK’s big furniture retailers”. Product will go into stores before the end of the year. The retailer lost its clothing licensing deal with US department store chain Sears over the period.