I was covering a topic with my retail marketing class recently on retail brand development and positioning. Coincidently I was reading an article about a retailer whose brand equity was extremely high in the 2990’s and has slipped off my radar in recent years. That self-same retailer was French Connection.

A brief history.

It was established in 1972 by its founder; Stephen Marks. Its name derived from a very popular film starring Gene Hackman (The French Connection) which was released during that year. He originally started off with an import business shipping hot pants (the fashion of the 1970’s) to the UK from Paris. He then established his own brand – Stephen Marks, London where he designed jackets and suits. When visiting Hong Kong he was one of the first entrepreneurs to spot the benefits that could be achieved by sourcing products from cheap suppliers. This culminated in the launch of French Connection.

Always one for independence, Marks build up the brand, doubling the sales of the brand year-on-year for eight consecutive periods.

He then listed the company on the stock exchange but ran into problems when investors began to (in his view) interfere with the direction of the business. This led to a slowing down of sales.

He got rid of these investors and hired a marketing expert: Trevor Beattie, to provide leadership and a change in direction for the brand.

It was he who came up with one of the most iconic images of the 1990’s. They launched a range of tee shirts with the ubiquitous title of “FCUK” stamped on their fronts. They sold in their millions for around £20 and were aggressively promoted with risqué slogans such as “FCUK LIKE A BUNNY”.

Many marketing felt that the message behind the brand captured the brashness, greed and individualism of the 1990’s Britain. In essence it became a symbol for the so-called “rebellious shoppers of that period.

Inevitably as with most “hot” brands it probably became a victim of over-exposure. Over the past decade or so it suffered from that plus counterfeit products being sold under its name. It also faced major competition from fast-fashion retailers such as Zara, H&M and more recently online retailers selling similar product.

Quite simply such retailers as those listed above were able to offer fashionable clothing at prices well below what French Connection was charging in its stores and online. French Connection was in danger of becoming an irrelevance on the high street.

The problem was exacerbated the reluctance, some would say stubbornness of the founder Stephen Marks. He has consistently refused to stand down amid much pressure from investors (he retains 42 per cent control of the business).

Its overall response in recent years is to continue to close stores and also using up much of its cash reserves to prop up the business: its cash pile has dropped from £15 million to £7 million in recent years. Sales have dropped to around £155 million.

More recently in early 2017 it is rumoured to have negotiated a reduction in its rental of its Oxford Street flagship store.

Are there any good news items for this retailer? Well it operates a wholesale division which is performing respectably as well as its online retail operations (also performing well). Indeed some commentators recommend that it should split its retail and wholesale divisions, close down its retail stores and focus on the online element of its retail operations.

It also operates a concessions business which has grown from 43 in 2011 to 53 in 2016. If it were to become a concessions business only, it could be argued that it would be in a stronger position financially due to being able to eliminate the high rental costs of its store portfolio.

The reasonably healthy performance of concessions and the wholesale division would suggest that there is perhaps a strong argument to divest completely out of retailing.

The fundamental problem in my view rests with its current relevance (or irrelevance) to its target market.

Its core market traditionally has been the 20-30 female and more recently male market.

However it does not take an expert in retailing to work out that it has a major problem in connecting with this market in today’s competitive and economic conditions.

The deep recession in recent years has arguably educated shoppers to be more value conscious and to seek out retailers that can provide quality / trendy clothing at a reasonable price. For the average person in the target market French Connection does not provide this level of value. While it comes up with nice designs that are fashionable and of sound quality, it is left behind when it comes to the price points. Many shoppers rule out French Connection because they see its product offerings as being too expensive relative to the likes of Zara, H&M and Mango.

Women in this age bracket who seek trendy and fashionable items will make purchases at these competitors. However when one looks at the price points in French Connection they see items priced at the levels seen in retailers such as Karen Millen and Whistles. These latter retailers tend to focus on well-designed, lifestyle brands which can be justified by their price points. Commentators feel that French Connection cannot justify charging similar prices as the clothing portfolio for women does not justify such a strategy.

Interestingly the menswear section is more realistic in its pricing and is in line with its competitors. French Connection in this segment focuses on smart, fun designs (for example its tie range), perhaps not as successfully as Ted Baker, but the price points reflect this and performance in terms of sales is more impressive than in the case with the womenswear division.

Brand evaluation surveys also do not offer encouragement either.

It rates bottom when compared to its main competitors in the issue of value for money. The likes of Zara and H&M score far higher on this measure. French Connection scores better on quality (which you might expect).

From a brand positioning perspective French Connection appears to be going nowhere. The fashion retail market in the UK is very competitive and as we mentioned earlier, retailers such as Zara and H&M have effectively moved into the space that was once held by French Connection. Only they are doing so with lower prices while offering at the same time affordable value for money – particularly in the areas of trendiness and design.

Where next for French Connection?

As we mentioned earlier it would appear as though it will have to speed up the closures of its stores, eventually perhaps pulling out completely and focusing instead on its concession businesses and wholesale division.

The role of the founder will have to change. Due to his stubbornness he has failed to make the necessary changes and will probably need to recruit another marketing expert in the fashion business to once again transform it. The way forward may be through its online business.

Quite simply it cannot live on the past glories of the 1990’s. Otherwise it may go to FCUK!


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