LONDON — Despite erosion in its North American wholesale business, there’s apparently no stopping the momentum at French Connection.
This story first appeared in the March 13, 2003 issue of WWD. Subscribe Today.
Even with the perilous retail market in the New World taking more than a 40 percent bite out of FC’s wholesale business, the trendy U.K. casualwear company reported Wednesday that profits in the fiscal year ending Jan. 31 rose 37.8 percent to $32.6 million from $23.7 million in 2001. Sales rose 6.8 percent to $385.6 million from $361.1 million. Dollar figures have been converted from the pound at the current exchange rate.
“The rises are directly related to our continuing focus on the product, retail environment, advertising and marketing,” said Stephen Marks, chairman and chief executive of French Connection Group PLC.
“Over the next five years, it is up to us to make this an $800 million business,” said Marks, whose firm will be venturing into Mexico with a retail license and expanding in Hong Kong with a retail joint venture later this year.
As reported, the company in September will introduce its FCUK fragrance, to be produced under license by Zirh International Corp., the men’s U.S. skin care manufacturer and a division of Shiseido. It will launch in approximately 9,000 department store and perfumery doors — in the U.S., Europe, Asia and the Mideast — as well as 100 French Connection stores. There are plans to roll out the scent and related products in about 40 countries within two years.
The bulk of French Connection’s sales — 80 percent — comes from the U.K. and Europe, where the company has 82 directly operated stores and 29 franchises. Sales in the U.K. and Europe increased 21.1 percent to $163.5 million, thanks in part to an increase in retail space.
In North America, where FC has 36 directly operated stores, retail sales increased 6.9 percent to $51.8 million from $48.5 million, but the North American wholesale business was an entirely different story. Sales dropped 43.2 percent to $19.4 million due to “difficult” retail conditions.
“We’re working our way back upwards in terms of wholesale in North America,” Marks told WWD during an interview. “We think sales trends are looking very promising in the U.S.”
He said comparable-store sales in the first five weeks of fiscal 2003 were up 18 percent, versus a 12 percent increase in the U.K. and Europe.
He said the company was on track to open a new store at the Pentagon City Mall in Washington, D.C., and that Marshall Field’s was planning to open a French Connection space at its flagship in the fall. Marks said French Connection was looking to open a total of 25 stores in North America in the medium term.