French Connection sales fail to inspire prospective buyers
The latest French Connection sales figures will do little to inspire prospective bidders as the company searches for a white knight.
Pippa Stephens, retail analyst at GlobalData, says that despite the French Connection sale process being extended by three months in June, the ailing retailer has prolonged this further, as it continues talks with “several interested parties”.
Group sales for the first half were down £7.1 million – by 12.2 per cent – to £51 million, and underlying profit remains in the red.
“Its performance is doing little to assure prospective buyers of its future potential, however new ownership should allow for an essential revamp of its ranges and store estate to try to regain appeal among shoppers,” says Stephens.
“French Connection’s product offer lacks originality and direction, with limited newness across seasons, lagging behind other premium competitors like Whistles and Reiss, so a fresh perspective from its design team is crucial to reignite shopper interest.”
Although group sales are still declining due to store closures and a shift in wholesale orders into the second half of the year, the retailer’s UK/Europe like-for-like sales show an improvement having shuttered nine underperforming locations in the first half, including two off-price outlets.
“French Connection must continue to review its remaining estate and carefully plan to transition customers to its online platform to avoid shopper desertion – especially its department store concession customers,” says Stephens.
“Its new concept store in London, which opened in July, has shown reassuring results, with exclusive products, a large homewares offer and a coffee shop supporting footfall. If successful, this should be rolled out to a handful of its large regional stores to help reinvigorate the brand and improve shopper perception.”
French Connection sales online have continued to decline, down £600,000, or 9.6 per cent, during the first half, despite the UK online clothing market forecast to grow by 7.4 per cent this year.
“With a greater focus previously put on third party operations, such as Next and Asos, French Connection must ensure that this does not cannibalise its own sales. It needs to invest in its own website, with shorter delivery lead times, and enhanced style inspiration to increase engagement,” concludes Stephens.