Byline: James Fallon

LONDON — French Connection PLC Monday said it plans a substantial expansion in the U.S. over the next few years as it reported a 39.4 percent increase in aftertax profits to $74.9 million on a 33 percent rise in sales to $246.4 million for the year ended Jan. 31.
This compares with aftertax profits of $53.7 million on sales of $185.3 million a year earlier.
Earnings per share rose 39.4 percent to 74.9 cents from 53.7 cents.
Its growing retail and wholesale presence in America is one of the reasons for the growth in its profits and sales last year. Pretax profits in North America rose 131 percent last year to $5.9 million from $2.5 million on a 57.3 percent increase in sales to $67.9 million from $43.2 million. (Figures were converted at the current exchange rate.)
The company currently operates about 75 French Connection and Nicole Farhi stores worldwide, including 22 in the U.S. The American stores include its first freestanding Nicole Farhi store there, which opened in New York in September 1999.
The British women’s and men’s wear retailer, which also owns Nicole Farhi, plans to open up to 30 freestanding stores in the U.S. over the next three years, as well as expand its wholesale operations. The majority of the stores would be French Connection units, said Stephen Marks, the company’s chairman and chief executive.
French Connection also sees the potential to significantly expand its wholesale sales in the U.S. The brand is carried in all 18 Bloomingdale’s stores and 54 Nordstrom units as well as in Burdines, Macy’s and Dillard’s.
“U.S. store groups are finally waking up to what we have to offer,” Marks said. “They are recognizing French Connection and over the next few years, we should see a big buildup in business with them.”
The company currently is negotiating leases on three more French Connection stores in the U.S. — in Las Vegas, Chicago and Scottsdale, Ariz. — and has started early talks for about five more sites.
“We’ve selected another 30 destinations where we definitely would like to open in the U.S.,” Marks said.
Marks said there also is the potential to open more freestanding Nicole Farhi stores in the U.S., although the short-term priority is to grow sales at its New York flagship and to increase the brand’s wholesale sales.
The French Connection executive is not concerned by the moves into the U.S. of such other European retailers as Hennes & Mauritz or Zara. “Hennes has been in the U.K. for a long time, and we’ve been able to compete against them,” Marks pointed out. “I think in the U.K. they impact such other retailers as Arcadia more than they do us.”
In addition to expanding in the U.S., the company has begun to grow its retail and wholesale operations in other overseas markets and is stepping up its licensing program for the French Connection brand. French Connection opened a 5,000-square-foot store in Cologne, Germany, in late November and hopes to open its first freestanding store in France — in Paris — later this year, Marks said. In the Far East, French Connection is close to a deal with a master licensee for the brand in Japan and expects to open a franchise store in Singapore in August. It also will open franchised stores on the British island of Jersey; Londonderry, Northern Ireland, and Riyadh, Saudi Arabia, this year.
The group recently signed a license with Timex Corp. for a French Connection watch line, which will launch later this year. It also has signed a license with the British beauty retailer Boots the Chemist, which will introduce in stores in September a men’s FCUK personal hygiene line of 32 products. French Connection plans to expand its own line of bath products this fall with the launch of a series of facial products developed by Jo Malone and Marks’s wife, the stylist Alisa Marks.

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