Ailing retailer French Connection has not managed to shed its financial woes, and has issued a statement that said profits fell 7 million pounds in the first half of 2012 compared to last year.. The company said the reason for adjusting its figures is due to a 7 percent drop in sales in the months to July 31st, with additional discounting of merchandise eating at margins.
The high street retailer said initial reaction to its winter range had been “encouraging” but it was “very cautious” in its outlook for the second half in light of the first six months.
In today’s trading statement, the company said the supply agreement between LF USA and Sears for products branded "UK Style by French Connection" had been terminated following a change in strategy by Sears' management. As a result LF USA had terminated its licence agreement for "UK Style by French Connection".
The licence generated net income of 1.9 million pounds in the year to 31 January 2012 but French Connection now expects that the income from the licence for the year to 31 January 2013 will be around 0.9 million pounds. The company said a number of new licensing opportunities were currently being developed.
Founded in 1972 by Stephen Marks, French Connection set out to create well-designed fashionable clothing that appealed to a broad market. The company's FCUK marketing campaign was controversial and dubbed by some to be tasteless and obnoxious, but proved to be very popular on a range of t-shirts with messages such as "fcuk fashion".
Image: French Connection AW12