French Connection designs push sales increase
Struggling high street retailer French Connection has seen an improvement in like-for-like sales in its British and European divisions. The company stated growth of 3 per cent in the last 13 weeks while total sales increased 5 per cent. The strength of the fashion ranges is the driving force behind the rise, according to a company insider.
In North America turnover increased by 6 per cent in total and 7 per cent on a like-for-like basis in the thirteen week period. "Overall, we are pleased with the performance of the French Connection ranges in our retail business and we believe that in an extremely competitive market it is the strength of the design of our ranges which is driving the improvement in our business," the company stated.
16 May 2007
Baugur criticizes French Connection
Baugur, which owns 14 per cent of shares in struggling retailer French Connection, has criticised the company's performance. A spokesman said: 'The results are disappointing. It was the first time the company has made a loss in 14 years but what's worrying is that both the wholesale and retail division performed badly.' Baugur is in prime position to buy the chain should its founder Stephen Marks sell his 42 per cent stake in the firm. Marks does not want to sell until he has turned around the firm, which last week posted a six-month loss of £3.6m on decreasing turnover of £111.2m compared with a profit of more than £5m in the same period last year. A spokesperson for French Connection said a turnaround was defined by ensuring the company was profitable.
French Connection sales soared on the back of the ubiquitous FCUK banner but the public has tired of this. Its clothes are considered well-designed but expensive for the mid-market, which has become increasingly competitive and price-driven. The company, founded by Marks in 1972, had issued five warnings to investors in 18 months, saying that profits would be lower than expected. It ditched its advertising agency, Beattie McGuinness Bungay, earlier in the summer after a poorly received brand relaunch campaign that featured a lesbian kiss.
17 September 2006
French Connection suffers H1 loss
French Connection has reported a pre-tax loss of £3.6 million in the first half ended 31 July compared with £5.1 million the year before. Sales declined by 6 percent to £111.2 million. “The challenges we faced during the last financial year have continued to impact trading in the new year. It has taken longer than we had hoped to translate the changes we have made in our business into sales growth,” said founder and Chairman Stephen Marks.
The struggling chain has given a series of profit warnings over the past two years. It got rid of its provocative logo after the once so successful campaign outlives its welcome. The company's more recent campaign featuring two women fighting and kissing – symbolizing fashion and style – did little to win customers over. Financial analysts have said the fashion chain's prices are too high for a high street brand, yet it is not exclusive enough to be a designer brand. Tom Buchanan of corporate communications firm Brunswick Group, the official spokesman for French Connection, said the retailer has repositioned the brand by “enhancing the ‘fashionability' of its collections”, while maintaining its original pricing. “The quality of its collections is simply better,” he said.
Meanwhile, Marks is optimistic about the coming season. “The strong initial reaction to the new winter collections indicates that our efforts are having an impact…with sales in the early part of the new season encouragingly ahead of last year,” he said. Comparable sales in the UK and European retail business were up 9 percent in the first three weeks, while these were flat in the first half. Margins in the first half fell due to a longer winter sale at the beginning of the period. Sales to wholesale clients fell by 25 percent. In the US , comparable retail sales fell 10 percent, while wholesale revenues increased 12 percent. The company has said forecasts for the full year are in line with market expectations. “Net profit for the full year is estimated at £4 million,” says Buchanan.
12 September 2006
French Connection to announce losses
French Connection will this week announce its first group loss in 14 years following a fall-off in sales. The retailer will say on Tuesday that it made a pre-tax loss of up to £4m for the six months to the end of July, compared with a pre-tax profit of £5.1m last year.
The last time that French Connection, which is still run by founder Stephen Marks, reported a group-wide pre-tax loss was in 1992, when it was £8m in the red for the full year. The retailer has had an unsettling period. It issued three profit warnings in the 13 months to December 2005, and warned earlier this year that like-for-like sales were in negative territory. Furthermore, French Connection ditched its advertising agency earlier in the summer after a poorly received brand.
A French Connection spokeswoman would not comment on this week's figures. However, Peel Hunt, the broker, is forecasting a pre-tax loss of £3.6m while Evolution Securities expects a loss of £1.5m. Earlier this year analysts reduced their full-year profit expectations. French Connection is expected to make a full-year pre-tax profit for the year to next January of £3.8m, down from £15.7m this year.
11 September 2006
FCUK ad founder to split with French Connection
French Connection and Trevor Beattie, the advertising guru, are ending a 10-year association that has produced some of the most provocative and unpopular ads in recent retail history. An attempt to move the struggling retailer on from the infamous FCUK campaign ended in failure this year after a campaign featuring a lesbian kiss flopped.
Mr Beattie turned the FCUK acronym, used on communication between its London head office and its Hong Kong buying team, into the "FCUK fashion" logo that was emblazoned across shopfronts, T-shirts and at one point even a radio station. His company, Beattie McGuinness Bungay, then came up with the "Fashion versus Style" ad campaign where two women sparred before graphically making up.
Intended to provoke a debate about fashion, the campaign was built around a quote from the late French designer Yves Saint-Laurent, but it did not have the desired effect. In May, the unpopular campaign was one contributor to French Connection's fifth profit warning in 18 months after it failed to revive the group's sales. Mr Beattie said it had been his decision to stop working for the retailer, a founding client when he launched his new agency just over 12 months ago. French Connection declined to comment on the split. "It's not every day you resign an account you've worked on for 10 years," Mr Beattie told the trade magazine Campaign. "But fashion being fashion, standing still is not an option. I feel the time is right for us to move on."
9 July 2006
French Connection warns of lower year-end results
At the Company's Annual General Meeting today, Stephen Marks, Chairman and Chief Executive, will make the following statement; "In line with other fashion retailers we found that trading over the Easter period was difficult and did not meet our expectations. In our UK/Europe retail business we have seen a decline in like-for-like sales of 2 per cent since the beginning of the new financial year. In our wholesale business in UK/Europe, in-season orders for our Summer 2006 ranges from our wholesale customers have been subdued. Our forward order book for the Winter 2006 ranges is 12% below the level achieved last year."
"In our North America business, sales in the wholesale channel have continued to grow, however retail sales for the season to date have been disappointing. There is little indication at the moment that the market conditions or our trading performance will change, and while the Board continues to focus on driving improvements in each of our businesses, and we are only a short way into the year, we are materially reducing our expectations for the full year results."10 May 2006
Major disappointment for French Connection
French Connection has suffered a blow as full year profits more than halved. The fashion retail chain, which issued three profit warnings last year, referred to the results as a “major disappointment”.
Wholesale orders, which make about 40 percent of UK and European sales, dropped 25 percent.
In the UK, retail revenue rose 2 percent to £113 million. The average selling space increased 12 percent but like-for-like sales fell 5 percent, although they managed to flatten out during the second half of the year.
The US saw its retail business slow down, resulting in weaker operating profits. The wholesale business, however, showed healthy growth.
Pre-tax profits more than halved to £15.7 million, compared with £33.7 million the year before. Turnover fell 7 percent to £246.3 million and operating profit was down 64 percent at £12.5 million.
“The last year has proved to be the most difficult we have experienced for a considerable period of time,” said founding chairman Stephen Marks. “These results are a major disappointment for the board and we are doing all we can to reverse the decline.”
The group, which also owns designer label Nicole Fahri and mail order company Toast mail, said it was “focused on improving ranges” and believed that those for summer 2006, now in stores, were a step in the right direction. The company declined to comment on how trade is doing, as the collection has only been in stores for a brief time. Reaction to the range and the advertising had been good though, it said.
Recently, the company has tried to revive the brand with a new ad campaign which features two women, representing Style and Fashion, fighting then kissing each other. The campaign, which cost £2 million, provoked more than 100 complaints. Just as with the provocative FCUK brand logo, mastermind Trevor Beattie again managed to incite the wrath of some of the public.
Chief operating officer Neil Williams denied that the brand was losing customers as a result of high pricing, saying: “We look at pricing very closely. When the product is a good fashion-forward product and well made, the pricing is right.”
“Strong product design has always been the key to our long-term success,” said the company. “In this regard we have faced some challenges over the past few seasons. Our return to grow will be a slow process dependent on producing distinctive, fashionable, well-made garments on a consistent basis.”
14 March 2006
French Connection denies Russian rumour
The rumour that French Connection is prepared to launch on to the Russian market has been refuted by a spokesperson for the fashion retailer, reports just-style.
According to Biznes newspaper the retailer had struck a deal with the Russia-based ABM Holding to establish a chain of franchised stores. A spokesperson for French Connection was, however, unable to give any information regarding a deal in Russia.
“We are in negotiations with lots of companies in different countries at the moment but there is no specific focus on Russia,” she told just-style. “The company will make any announcements as and when deals happen.”
18 January 2006
French Connection keeps logo
French Connection has won the legal battle to secure the FCUK logo on its watches and jewellery.
The British fashion chain had been assailed by complaints from retired businessman Dennis Woodman who had said the logo went against “generally accepted principles of morality” in light of how it could be misread.
The UK Trade Mark Registry dismissed the complaint, citing the success of the brand that stood for French Connection United Kingdom.
Woodman did not contest the use of the logo in the company's other product lines.
21 december 2005
French Connection abandons provocative slogans
Eight years after introducing its famously shocking “fcuk” slogan, the floundering British fashion retailer French Connection has announced that it will abandon its branding in favour of something “more subtle”.
The company announced that the logo had been dropped from its clothing and billboards.
“Use of the fcuk logo has been toned down and will be used in a much more subtle way,” spokeswoman Lorna Perrin told Britain's Press Association. “Branding on the recent autumn/winter collection has been significantly reduced and used in a softer manner. But fcuk is interchangeable with French Connection as the company's name and so will continue to be used.”
This move comes in the wake of a severe sales slump, with like-for-like sales dropping 9 percent in the first six months of the year. Profits have dropped from £16.2 million to £5.1 million.
Although sales and profits skyrocketed soon after the logo was introduced in 1997, this September saw the company extending its summer sale to clear excess stock.
According to analysts, consumers have become bored with the fcuk slogan. “Logos are no longer prevalent in fashion collections and this is a response to the fact that our customers want something different,” said Perrin.
Tough trading conditions on the high street have also played their part in the company's difficulties. Earlier this year, French Connection issued a profit warning and admits that it will have to fight to earn more than £20 million this year.
French Connection has more than 100 stores and franchises throughout Europe.
3 October 2005
Sears to carry FCUK?
US retail giant Sears Holdings Corp is in talks with troubled British fashion label French Connection Group Plc to carry its clothes in stores, a spokeswoman for Sears said on Tuesday.
“We are talking with French Connection but do not have any information to share at this time,” Sears spokeswoman Lee Antonio told Reuters. French Connection could not be reached for comment.
French Connection reported a 69 percent fall in first half earnings this month. It said full year profits fall at the lower end of expectations.
28 September 2005
Troubled French Connection attracts Baugur
UK fashion chain French Connection continued to disappoint as it reported first-half profits had plummeted 68.5 percent and adjusted expectations for the year. The company said that its wholesale order book for Winter 2005 and Summer 2006 fell 15 percent below what it was this time last year. Wholesale sales in the UK and Europe represent approximately 34 percent of total turnover.
In July, French Connection said that profits for the year would fall almost 40 percent below the mark of previous years, warning that it would realise £20-£25 million in pre-tax profits, down from £33 million last year and analysts' expectations of £30-£35 million. Turnover dropped 8 percent to £117.9 million. Meanwhile, operating profits plunged 71 percent to £4.7 million. “The business has faced a challenging six-month period during which the retail environment in the UK has continued to worsen,” said founding chairman Stephen Marks. Retailers' experiences are divided. Primark, the discount retailer, is thriving while chains like Next continue to struggle.
French Connection's poor performance prompted speculation of a possible takeover or of Marks taking the company private. On Tuesday shares in the company soared more than 16 percent when Baugur, the Icelandic retailer that owns high street brands like Oasis and Karen Millen, acquired the second largest stake in the company, behind Marks who owns 42 percent. Media reports state that Baugur increased its stake in the company to 9-10 percetn, up from almost 3 percent. It is believed to have purchased shares worth almost £18 million. Although Baugur's stake is believed to be passive, there has been speculation that the company regards the brand French Connection UK as old and ready to be axed.
14 September 2005
FCUK suffers in slowing retail climate
The slowing of retail sales combined with lower wholesale orders caused revenue for FCUK' for the past six months to decline to £117.9 million. This is 8 per cent less than the equivalent period last year. The group gross margin increased by 1.2 per cent to 55.1 per cent and operating costs increased largely as a result of increased retail selling space. Profit before tax was £5.1 million (2004: £16.2 million). Wholesale customers were also affected by the difficult trading conditions and were cautious with their buying. Revenue amounted to £39.5 million (2004: £51.4 million) and the gross margin was slightly lower at 38.5 per cent (2004: 40.7 per cent) due to a higher level of markdowns for stock clearance during the period.
The group traded from 16 per cent more space than the equivalent period last year, including four new stores opened in the six-month period, total retail revenue in UK/Europe was broadly flat at £51.1 million (2004: £51.2 million). The gross margin achieved was 67.1 per cent over last year's 65.8 per cent with support from both the weakening of the Dollar and increases in core margins. The fcuk buymail and Toast businesses have continued to develop and Toast's first standalone store in Harrogate has performed well enough to encourage the company to look for further sites.
Stephen Marks, Chairman and Chief Executive, said "In the current tough market conditions we remain focused on ensuring that our products meet the expectations of our customers while maintaining our operating standards and controlling costs. The recent signs of a positive response to the Winter ranges are encouraging, however we now anticipate that the outcome for the year will be around the lower end of the expectations we described in July".
13 September 2005
No fashion connection with French Connection
"French Connection has failed to adapt to the changing price perceptions within the UK clothing Market. It is neither cheap enough to compete with the likes of Zara, H&M and Top Shop, nor is it distinctive enough to command the same premium as someone like Ted Baker", says Iain McDonald at Numis Securities. Richard Ratner at Seymour Pierce adds" The company seems to blame the general retail malais, but we believe it is more to do with French Connection having got it badly wrong last winter."
Successful high street retailers such as Top Shop and Zara are known to interpret the next designer fashion craze and incorporate them into their collections just weeks after the designs are presented on the catwalk. Shares for French Connection droped 8% valuing the group at about £230m, half the value it was worth just over a year ago.The group yesterday said that it expected profits to be in the region of £20m to £25m. It also pointed to low sales despite an improved stock range and added that wholesale orders had fallen as department stores, which stock FCUK ranges, had cut back on reorders.
3 July 2005
French Connection in corporate governance dispute
Fashion retailer French Connection is heading for a showdown with the Association of British Insurers over corporate governance at its annual meeting. The ABI, which represents the UK's biggest shareholders, has issued a "red top" alert, indicating serious breaches of corporate governance best practice. An ABI spokesman described the presence of only one non-executive director at French Connection as 'deficient'.
24 April 2005
FCUK denies sales rumours
The operations director of British high-street fashion chain French Connection Group Plc, Neil Williams, has denied rumours of a sale.According to the AFX news agency, Williams announced that chairman and major shareholder Stephen Marks was not looking to sell the company, but was intent on returning the chain to its former strength.
Furthermore he denied that potential bidders had approached the company. He said that as far as the company was awar, Marks was not planning on selling his 42 per cent stake in the business.Williams responded to the rumours after French Connection announced a 17 per cent drop in same-store sales for the first five weeks of 2005.Pre-tax profits for the year to the end of January fell 15 per cent to GBP 32.3 million. Meanwhile, turnover for the financial year 2004 decreased by 1 per cent to GBP 265.7 million.
9 March 2005
French Connection Underperforming
French Connection has conceded that it is underperforming in an already depressed UK consumer market, but insists it will use the experience to build a stronger business.
In the year to the end of January, group turnover fell 1 per cent to £265.7m. UK retail turnover fell 5 per cent to £110.6m, despite a 15 per cent increase in total selling space, with a like-for-like decline in sales of 12 per cent. Pre- tax profits fell 15 per cent to £32.3m.
In the first five weeks of the current financial year, like-for-like sales of the new season ranges are down by 17 per cent. French Connection chairman Stephen Marks said: "For the first time in nine years our growth record was interrupted by a disappointing trading performance in the second half of the financial year. We have learnt lessons from this and feel confident that we will use this experience to return to our growth track and build a stronger business for the future."
"The key to our success has always been the strength of our product design and the aesthetic of its presentation in-store. We are working hard to ensure that we can meet our customers' expectations in these areas."
The company said sales had been 'directly affected' by an over-emphasis on product lines that had been successful in previous seasons at the expense of more fashion-led products. In response, the retail buying teams have been strengthened, with new products to be introduced over the next few months to strengthen the summer ranges.
Seven new French Connection stores were opened, as well as six acquired from franchisees. The business also opened four Nicole Fahri concessions in House of Fraser department stores.
On current trading the company said that new additions to the ranges have provided some indication that we will see an improvement over the remainder of the season. Four new French Connection stores will open in the UK and Europe, and wholesale orders for summer 2005 in are broadly in line with last year in the UK and Europe, and well ahead in North America.
8 March 2005
Baugur has interest in French Connection
Baugur, the Icelandic retailer that owns UK chains from Hamleys to Oasis, is looking to acquire a 3 per cent stake in French Connection, the fashion retailer. Baugur is believed to have instructed a London-based broker to acquire the stake, which will cost around £9m. The purchase will increase speculation that Baugur could eventually bid for all of French Connection, which issued a profit warning last November.
28 February 2005
Otis Ferry cautioned by French Connection
Lawyers for French Connection have written to Bryan Ferry's son, Otis, who has been seen wearing a white t-shirt inscribed with a none-too-subtle 'FCUK Yer Ban' message as he protests against the ban on fox-hunting.
Ferry has been warned that he has infringed French Connection's copyright on the logo and adding that they could take action if he dares wear the t-shirt in public again.
20 December 2004
When fashion becomes unaffordable
News of British retailer French Connection's severe profit warning has the industry speculating about the cause of the once popular fashion chain's approaching demise. People bandy about the terms "branding" and "not sufficiently attractive product range". However, "pricing" appears to play the bigger role in the equation.
Once upon a time French Connection was an affordable, fashionable way to keep up with the Joneses of Cadogan Square. However, with the arrival of other high-street stores like Zara, FCUK's prices have started to look increasingly disproportional. Even French Connection's founder Stephen Marks admitted to the store's overpricing, which has prohibited it from competing properly with the likes of Next, Warehouse and Zara.
There is an unspoken rule for those who like to spend money on fashion but who do not carry the last name "Hilton": you either spend a (relatively) great deal on a very exclusive item like a luxurious shearling coat or a pair of Jimmy Choo's. Or you spend very little on a variety of trendy outfits from high-street shops and markets (think Camden and Portobello). However, the message is clear. The high street is for bargains and Sloane Street is for splurges. So, when a high street retailer begins to sell its creations - still of high street quality - for Sloaney prices, shoppers become weary. And offended. It is as if said retailer is cheating its customers out of the great bargain they had become so accustomed to. The experts can quibble about the branding all they like, but the bottom line is always the price.
Yes, French Connection sold too many basics and not enough fashionable items, but this would not have effected the books as much if the company had matched the pricing accordingly. Just look at the Gap. In an economy where most of us need to practice caution, price/quality ratios should mirror the markets and one's competitors. After all, location is everything. If consumers want upmarket, they will go to the upmarket shops.
High street shopping stands for trendy and affordable. The mix has always worked well. Don't fix it if it ain't broke.
22 November 2004
French Connection in trouble
British fashion chain French Connection announced a drastic profit warning last week, sending both the City and the industry into a tailspin. Conjecture regarding the company's appalling performance was endemic. The company blamed an unattractive winter range - with too many basics and not enough fashionable items - for the drop in pre-tax profits.
City analysts are now cutting their forecasts for pre-tax profits for the year ending January 2005 by 15% to GBP33 million, as opposed to last year's GBP39 million.
The company's Chairman and Chief Executive, Stephen Marks, admitted to having made mistakes but said the problems would be sorted out. "It's a blip. It's the first time in 10 years, but we'll sort it out," he told reporters. Marks founded French Connection in 1969 but sold GBP36.5 million of his shares in June, thereby effectively losing control of his company. In the wake of his recent divorce Marks conceded that he may not have had his eye on the ball as much as he should have.
Advertising agency WWD recently conducted a study that showed that sex was not selling as well as it had in the past. This might be one of the problems facing French Connection, whose provocative logo FCUK caused much consternation when it first came out in 1997. However, Marks denies rumours that the public has become fed up with the campaign, claiming that the FCUK logo was on less than 30% of the items. He does admit, however, that pricing is an issue. The store's high prices prohibit fair competition with the likes of high street retailers Zara and Next. The rather tired logoed t-shirts do little to stimulate purchasing. It is up to Marks to pull his flagging company out of the mire.
22 November 2004
French Connection profit warning
The UK high-street retailer French Connection said today that it expected profits to be "significantly below expectations". The fashion chain said that its winter collection had failed to entice customers. Full year profits are anticipated to reveal a 15% decline as opposed to last year, after an 18% fall in like-for-like sales all over Europe in the third quarter.
The Group reported that it was unlikely that there would be any improvement
in the situation during the rest of the season. French Connection told Ireland
Online that it was taking steps to strengthen the spring line, which is expected
to hit stores in late January 2005.
16 November 2004
FCUK association with narcotics
The youth oriented UK brand will feature in a new Matthew Vaughn movie, Layer Cake. The film takes place in a future where narcotics are legalized and sold over the counter in a High Street chemist. Bottles of cocaine and ecstasy line the shelves of the chemist, with the name FCUK printed on them.
The controversy surrounding the company will reach new heights with this current association. FCUK Chairman Stephen Marks was not available for comment. However, first time director Vaughn, of "Lock Stock and Two Smoking Barrels" fame, stated that he thought a well-known brand name on a drugs bottle would really stand out and make a statement. The suggestive four-letter brand name was an indicator of the company's daring approach, so Vaughn felt confident in solliciting the firm's involvement. Vaughn also added that the subliminal message "Fuck Drugs" appealed to him.
28 September 2004
FCUK Less Controversial
FCUK, the brand famous for its controversial and in-you-face slogans, is to tone down its risqué advertising in a move away from aggressive and double-entendre catchphrases.
Slogans such as "Too busy to FCUK" and "Cool as FCUK" were getting more bad press from customers than the company bargained for. The collection, which is part denim and casual wear and part fashionable French Connection product was launched in 1997 by an ex ad agency professional. The company's approach to slogans was hugely influential and widely copied by the high street.
A spokeswoman for French Connection recently told Drapers Record that FCUK would be repositioned. "The logo will be much more subtle. It's a fashion brand - it has to change and go forward to keep up with the market."
It is understood that a T-shirt sample with the slogan "Bored of FCUK" can currently be found at he company's head office.
26 July 2004
French Connection Chairman To Sell Majority Shares
Chairman Stephen Marks of fashion chain French Connection is reported to sell up to 9m of his shares in the fashion business, resulting in raising in excess of GBP35m.
The move will see French Connection founder Marks, who currently owns around 51 per cent of the business, lose his majority ownership and reduce his holding to around 42 to 43 per cent.
The Retail Bulletin reported French Connection stated Marks "will use the proceeds to meet personal requirements". Media reports have linked the sale to a divorce settlement.
Marks has agreed not to sell any further shares for the next six months without
the consent of advisers Deutsche Bank and the company's board of directors.
Following the placing of between 8m and 9m shares, Marks will still have an interest in around 40m French Connection shares, including shares held in family trusts.
Updating on trading, French Connection said overall performance continues in line with expectations, with trading in the UK retail business weak in comparison with strong growth in the first half of 2003.
The wholesale business, which accounts for around 47 per cent of UK turnover, has performed well, as have the North American and licensing businesses.
30 June 2004
Sales Rise For French Connection
French Connection saw a rise in sales to GBP267.9m in the year to the end of January. This marks a rise of11 per cent, despite the US boycotting the brand. Pre-tax profits were up 28 per cent to GBP38.7m.
After complaints from the American Family Associated, US department stores Macy's and Bloomingdales temporarily dropped the brand and its fragrances after finding offence with the retailer's ad campaign depicting a young couple under the slogan Scent to Bed. This as the FCUK him and FCUK her raised much controversy America.
French Connection stated that the controversial advertising has had a powerful impact, and the results prove this with retail turnover growing by 14 per cent to GBP116.7million.
French Connection has opened 8 new stores in the past year, in addition to relocating four and expanding three. Nicole Fahri, which is also part of the French Connection emporium, has opened concessions in Selfridges Manchester and Harvey Nichols Birmingham and Manchester.
The new financial year has started well for French Connection with improved wholesale orders, and further strong retail sales growth in North America. In the UK, 'soft' consumer spending has continued into the new year.
9 March 2004
French Connection Logo Causes Controversy in US
Branding merchandise with initials is as much a fashion commodity as the clothes themselves. From YSL to D&G, logo mania is a global phenomena when people everywhere instantly associate a beige checked pattern as being Burberry, and a single red stripe as Prada Sport.
It does get a bit trickier, however, when through clever re-wording and tongue-in-cheek advertising your logo is associated with an expletive, as in the case of British retailer French Connection (read: FCUK). Cashing in on logo-mania is nothing new, and for French Connection, branding its name on T-shirts, jackets, wallets and knapsacks, sales have been sky-rocketing. Total sales at French connection rose from GBP 122 million, to GBP203m in the first six months of the year. And the rest of 2003 should benefit from a newly launched fragrance line.
The new fragrance, in keeping with the branding tradition, also carries the four-letter logo. And by aggressively marketing these perfumes, U.S. critics say, French Connection has gone too far. Federated Department Stores, the parent company of Macy's and Bloomingdale's, recently pulled all French Connection merchandise and store displays with the logo, after complaints from parents and an e-mail campaign criticizing ads for the fragrance.
The fragrance campaign is being created by the London office of TBWA Worldwide, part of Omnicom Group, and it carries the theme "Scent to bed." The fragrance ads are particularly offensive, one American source said, beyond their use of the logo, because "there's no question that they are promoting sexual promiscuity among young people." French Connection contends that its use of the logo, which has appeared in Britain since 1997, is meant to be tongue in cheek. "The company does not intend to cause upset to the public through the use of the brand," the company said in a statement about Federated's decision.
Advertising specialists said the heightened scrutiny might lead to even more sales for French Connection among younger adults. "The controversy will resonate with the core audience, and they will feel closer to the brand," said Gita Johar, a marketing professor at Columbia University.
3 November 2003
Growth For French Connection
Fashion retailer French Connection has reported a turnover increase by 12 per cent to £122m in six months to the end of July.
The company saw pre-tax profits increase by 33 per cent to £13.7m in a first half which saw expansion in its retail, wholesale and licensing businesses in UK and Europe, and an improvement in its North America retail business, although there were "continued difficulties" in the North America wholesale business.
Chairman Stephen Marks said in a statement: "I am very happy to report considerable growth in our business during the first half of the financial year.
"The quality and credibility of our products and strength of our brands is reflected in the outstanding growth in like-for-like retail sales achieved in the period at 11.3 per cent in UK/Europe and 6.2 per cent in North America. We are confident that the good start that we have had to the second half will continue for the remainder of the year."
September 16, 2003
French Connection still going strong
British fashion chain French Connection on Wednesday reported a 30 per cent profit jump for 2002 and revealed it's enjoyed a strong start to the new fiscal year.
The company said profit before tax and goodwill rose to GBP 30.2 million. Turnover rose 7% to GBP 241m from the year-ago period and same-store sales grew by 11 per cent.
French Connection added that sales in the last five weeks have jumped 14 per cent and the company said it plans to further extend existing store space in the second half of the year and is hunting for new store sites in the major fashion capitals of Europe.
Chairman Stephen Marks said: "The business has developed a robust formula that has enabled us to perform extremely well.
"The reaction to the new season product, our strong retail performance and growth in forward order books gives us confidence that we will have another exciting year of significant growth."
March 13, 2003