French Connection's Buy-Back of Japanese Biz |
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| Thursday, 17 July 2008 | |
 French Connection Group plc, the London-based clothing retailer, has consolidated its position in the Asian market by buying back the remaining 50% stake in its Japanese business, French Connection Japan Inc. The fashion retailer has acquired back the business from Renown.
The transaction was satisfied by the waiver of a $3.95 million, loan due to Renown Inc. by French Connection Japan, and a cash payment of $479,600, made by Renown to French Connection.
French Connection Japan operates 21 French Connection-branded stores in the region under license from Renown. In the fiscal year to December 2007, the Japanese business recorded sales of $17.7 million, with a net loss of $2.79 million. French Connection said it is looking to move its Japanese business into profitability within three years. The Asian market is becoming increasingly important for western retailers. In French Connections full year results to March 2008, its licensed businesses in the Rest of the World division (not UK, Europe or the US), which includes Japan, had shown strong growth and produced a 30% increase in revenue. Renown, a Japanese apparel company, also owns the British luxury brand Aquascutum. Minoru Nakamura, president of Renown, said in Japanese press reports this year that he plans to sell between 10 and 15 unprofitable brands Renown owns or has interests in. Renown's rights to the trademark of the Kent and Curwen men's wear brand were sold in June. Also this month Renown forecast a net loss of $27.6 million, for the fiscal year ending February 2009. Image: French Connection |
Whereas French Connection Group was previously only engaged on a broad managerial level, it will now be directly involved in the day-to-day management of French Connection Japan.