French Connection: Market Analysis

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By: Conor Carroll, Linda Fitzek, and Ruth Kennealy, University of Limerick.

French Connection the high street fashion retailer could be in danger of disconnecting with its customers. Last year, investors were extremely anxious when the firm announced that sales were down by over 18% for a quarter. The British firm, which has enjoyed unparalleled success over the last five years, is now facing tough challenges ahead, as it tries to recapture the magic of its past sales successes. CEO Stephen Marks founded the company in 1972. He named it after his favourite movie. In the late nineties, the firm enjoyed meteoric growth. The company gained worldwide coverage, thanks in no small part to the firm’s use of a controversial four-letter acronym, which it used as its logo. Emblazoned across t-shirts, caps, bags and sunglasses the manipulated swear word became ubiquitous. Their T-shirts with some sexually lewd double entendre slogan on it became hip and de rigueur. However the concept may now have lost its appeal and fashion status. Becoming seen as tired and tacky. Where to now for French Connection? Background

French Connection operates as a multiple specialist fashion retailer, competing against the likes of Zara, H&M, Top Shop, Miss Selfridge, Next, River Island and Warehouse. This industry is highly competitive with numerous international brands fighting in the segment. French Connections’ operations cover several distribution channels, from their own retail outlets, wholesalers in North America, franchises, mail order, to concession stores in a variety of department stores such as Selfridges. The group has almost 150 stores worldwide including more than 30 in the US. The company hopes to double its presence in the US. It is trying to expand rapidly there, despite all of the negative current geopolitical connotations, surrounding all things French in the US. In February 2001, French Connection paid £23 million pounds sterling to its US joint venture partner ‘Best of All Clothing’ who had been operating the 24 French Connection stores before the buyout. Now French Connection holds complete independent ownership. Furthermore the company bought “Toast” - a mail order company. The company sells both female and male clothing apparel and tries to position itself as a design brand. It sells its products at higher price points than the likes of Zara and H&M. It is believed that recent troubles at the firm were attributed to weak collections that did not match the price positioning. Also that it stocked to many basic product lines, not helping it to differentiate it against other retailers. Customers felt that were getting better fashions at the likes of Zara, and that they were better value.

The Logo & the Ensuing Controversy
Advertising plays a key part of French Connections’ competitive strategy and has been credited with transforming FCUK into a formidable global force. The use of catchy yet controversial advertising has given them international brand recognition. Where once the brand name was known as a relatively small British fashion retailer, now it has become known as an international brand phenomenon. The FCUK logo, was created by high-profile advertising guru, Trevor Beattie, who runs the TBWA advertising agency. He recently landed the British Labour Party's advertising account, and is widely credited with turning the fashion retailer's fortunes around. Beattie has also been credited with Wonderbra’s famous “Hello Boys” ad campaign. The slogan was inspired by French Connection company executives who abbreviated French Connection UK on internal memos and was conceived in 1997. Every since, the brand has been used by the company in its advertising campaigns. The controversial adverts have placed the company in serious trouble with advertising regulators. Their website proudly displays the glories of past advertising campaigns featuring the slogan (see...
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