LONDON — French Connection hasn’t connected with any investors and is pulling down its For Sale sign.
The British high-street brand said Friday it has wrapped up a strategic review begun in October 2018 that looked at options, including an all-out sale or other strategic partnerships.
In 2018, after nearly 50 years of ups, downs, branding controversies and shareholder dramas, French Connection’s owner Stephen Marks said he wanted to sell his 42 percent stake in the brand he founded. The board appointed Numis Securities Ltd. as financial adviser.
The announcement capped years of declining sales and profits, not to mention shareholders’ frustration with Marks, who founded the original clothing company in 1969, and who holds the title of chairman and chief executive officer.
The company said Friday it will now focus on “completing its turnaround and building on the progress made in recent years.”
It plans to tighten up the store portfolio, renegotiate the cost base of the ongoing stores, seek out cost savings and collaborate with key wholesale customers to continue growing the business, particularly in the U.S.
French Connection plans to boost investment in the online platform to enhance the customer experience and improve conversion. It also plans to funnel more money into marketing to drive traffic and build up its licensing portfolio via expansion into new product categories.
The company expects to report its preliminary results for the year ending Jan. 31 on March 10, and those numbers will disappoint investors. The French Connection board said it is forecasting a loss before taxation of between 1 million pounds and 2 million pounds.
“Reflecting the continued challenging trading conditions on the U.K. high street, U.K. trading in both the retail and wholesale businesses has been more difficult during the second half of the year, especially during the fourth quarter,” the company said.
French Connection is one of many British high-street chains to fall on hard times in the age of digital shopping, environmentally conscious consumers, and increased competition from the big European fast-fashion retailers such as Zara and H&M.
Rising rents, onerous leases and an ingrained culture of discounting in the U.K. has added to the toxic brew that is poisoning many traditional high-street companies.