Fashion retail market has few barriers to entry and has minor or no opportunity to protect unique propositions. Participants in the industry usually quickly imitate trends and styles within the market. In addition, price competition in the market is drastic. This paper took French Connection as an example to evaluate its situation in the competition and give out suggestions.
French Connection is an UK-based fashion retailer found by Stephen Marks in 1972. Positioning in the upper end of the mass markets, French Connection targets customers typically aged at 18-35. At present, it designs, produces and distributes branded fashion products covering apparel, beauty, accessories and footwear to more than 50 countries. However, French Connection has been reported losses for over a five-year period. The 2011 annual report of the company pointed out that “Currently within the fashion high street retail market, French connection own on overall market share of 0.2% being dominated by the likes retailers Zara, Topshop and Next.”
To assess the company, this paper analyzed external and internal factors by utilizing PESTEL and VRIO framework and applied the result to SWOT analysis. Moreover, short-term and long-term strategies as well as an action plan were provided based on the assessment.
2. External and internal analysis
2.1 PESTLE analysis
Figure 1 PESTLE analysis of French Connection
PESTEL analysis is used to evaluate external environment that French Connection is facing with, and to demonstrate what opportunities and threats are there.
In politics, in October 2012, Department for Business and Innovation& Skills published BIS Retail Strategy, saying that government will work to liberalize overseas retail markets to open opportunities for UK companies; In March 2012, Department for Communities and Local Government published a document to highlight the important of high street and decided to invest more on high street.
With the help of government policies, it is a great time for French Connection to expand both nationally and internationally. Moreover, French Connection’s wholesale network makes the expanding process easier. In wholesale network, French Connection does not have to invest directly when step into a new region. It can sell wholesale apparel to local licensed and franchised stores. These licensed stores take on much of the risk and make consumers familiar with French Connection. Hence, French Connection can open its own stores based on customer recognition, which can reduce the risks and shorten the time to gain profits.
In terms of economy, the Office of National Statistics reported that economy grew by 1% from July to September, based on official gross domestic product figures, which measure the value of everything produced in the country. At the same time the total sales of UK rose by 1.1% in October. Additionally, according to the Office of National Statistics, the unemployment fell by 49,000 to 2.51 million in the third quarter, taking the jobless rate from 7.9% to 7.8%.
All these figures show that the economic is start to recovery slowly. There is still a long way to go. The economic recovery brings new prospects and gives French Connection an opportunity to get over its deficient financial condition. French Connection may start its recovery process from improving its e-commerce performance. As more customers are shopping online now, the ways to communicate with online shoppers are playing an important role of influencing consumers’ decisions. Advanced picture capabilities, description of the product detail, video, and even the time a page needs to load are all important factors that matter.
In environmental aspects, raising number of people are considering fast fashion too greed. They are calling for ‘slow fashion’ and ‘sustainable fashion’ to bring public’s attention back to the quality, environment, and social responsibility. In addition,...