French Connection posted a £7.2m loss this morning, six months after outlining its turnaround plans. The fashion retailer’s boss Stephen Marks speaks to Retail Week.
Retail Week: How did the business fall into a loss in the year to January 31 from a £4.6m profit last year?
Stephen Marks: We announced at the half year that the first half trading made a pre-tax loss of £6.3m. Then Christmas was not as profitable as we thought it would be and we lost about £1m. I think everybody did badly over Christmas. The issue was growing sales but at lower prices and mark downs.
We were going to have a loss whatever happened but we’ve had a very nice start to the year in February. And we look in good shape. Wholesale customers like the new winter collection.
Also, 17% of people that go on our website take part in our current ‘Make a Scene’ marketing campaign to make a film.
Are you on track to deliver your turnaround plans?
We are definitely on track. We are only six weeks into the year and we will know more by the half year.
One of the ways of turning around the business was to close 15 stores, how have you progessed with those closures?
We have been trying to close 15 stores and so far we have managed to close three. The idea is to close the other 12 that are unprofitable. We are legally bound on leases and so we have to pay rents and suffer the pain.
They are a concern but I don’t think we’re the only ones finding it difficult.
We’ve found them difficult to offload because some of the stores are not in good locations.
What are you going to do to improve trading this year?
It’s very simple, we need to sell more product at full price. We will also focus on expansion in China and India.
We have 27 stores in China and at least four more will open this year. We have 72 stores in India and we are planning on opening another 10 this year.
Eastern Europe also seems to be opening up for us and the next place we will look at is South America but that is a long-term plan.
Marketing will also be key. What we’ve done with ‘Make a Scene’ is quite new and we hope there will be more innovations like this
UK retail is our only downside.
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