- French Connection, known for its FCUK logo in the 2000s, reported a £10.5m pre-tax loss for the past year as sales fell 8%. Its share price has dropped from over 500p in 2004 to just 27p currently. - The brand has lost its aesthetic definition and is less compelling compared to competitors like Whistles that have reinvented themselves. French Connection is seen as less conspicuous on the high street. - Changes introduced by the founder last year include delaying Christmas sales, reducing stock levels, and overhauling the design team, in hopes of returning the brand to profitability.

1. 5/7/2015 From FCUK to seeing red, French Connection falls to loss ­ Telegraph
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From FCUK to seeing red, French Connection falls to loss
Ten years ago, the infamous FCUK logo helped French Connection to become one of the
most popular fashion brands in the UK. However, the scale of the challenges now facing
the company were highlighted on Wednesday as it slid into the red.
Shares in French Connection cleared 500p in 2004 Photo: Rex
By Graham Ruddick
7:35PM GMT 13 Mar 2013
French Connection posted a £10.5m pre­tax loss for the 12 months to January 31 as sales fell by
8pc.
Shares in French Connection are now worth 27p, valuing the company at just £26m. In 2004, its
share price cleared 500p.
Anusha Couttigane at retail consultancy Conlumino said: “Whilst ten years ago the FCUK brand
was synonymous with forward­thinking fashion, today French Connection seems to have lost much
of its aesthetic definition.
“The lack of distinction has disillusioned consumers who expect to extract more exclusivity in

2. 5/7/2015 From FCUK to seeing red, French Connection falls to loss ­ Telegraph
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terms of style. Whilst competitors, such as Whistles, have reinvented themselves as a leader in
fashion­led retailing, French Connection has become less and less conspicuous on the high street.
“Collections are simply not compelling enough to inspire big spending and this has led to it losing
ground in the upper middle market.”
The turning point for French Connection can be traced back to 2004, when the City’s confidence in
the business was dented when founder and chairman Stephen Marks sold £40m of shares to help
finance his divorce.
Later that year, French Connection issued a profits warning and its shares have never recovered.
However, speaking on Wednesday, Mr Marks said the brand can recover to the heights of ten years
ago.
Mr Marks, who is still chairman and chief executive, said that market research by French
Connection showed the brand was still “well received.”
“We are doing extremely well in America, we are doing better in America than we did a decade
ago, We are one of the few people in America who has been a success,” he said. “The problem is
UK retail.”
The company’s accounts show French Connection made an operating profit of £6.2m in North
America, but a £16m loss in its UK and European shops on the back of a 7.4pc decline in like­for­
like sales.
French Connection has been trying to close 15 loss­making stores in the UK. However, it has only
been able to sell or negotiate an exit on two in the last year and the leases on the remaining stores
last for up to another 11 years.
Landlords are reluctant to offer the retailer any concessions on rental agreements because, despite
French Connection sliding into the red, it still has no debt and a net cash position of £28.5m.
“They [landlords] basically don’t want to talk about us changing anything because they are taking
rent,” Mr Marks said.
However, although progress on closing stores has been slow, Mr Marks said that French
Connection is seeing “some good progress” from a series of strategic changes introduced last year.

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“Nine months ago we instigated massive changes. We are beginning to see the benefits, but it takes
a long time in our industry,” he added.
“Although it is very early days in the new year, we have seen a better performance in UK retail,
and we expect this to build as the year progresses.”
One of the changes involved delaying the company’s Christmas sale by a week because Mr Marks
wants to sell more of French Connection’s products at full price. He said: “We are managing the
business tightly in order to increase full­price sales volumes, limit discounting, manage inventory
levels, control cash and build confidence with our customers.”
Other changes by Mr Marks include retraining staff, overhauling working hours so more staff are in
stores during peak trading hours in the afternoon, cutting stock levels by 30pc and hiring a new
design team that has produced clothing which is “better thought and better designed”.
“We have demonstrated our ability to produce fashionable, wearable products over the last 40 years
and will continue to do so with a new and talented design team,” Mr Marks added.
“With the help of the broad range of improvements in our business, a strong balance sheet and our
global brand strength, we will return the business to profitability.”
Shares in French Connection rose by 2½, or 10pc, to 27p on the back of his comments.
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