French Connection - Recovering or Not?
When my colleague Richard wrote about French Connection last October he was cautiously optimistic that there were early signs that the brand could turn their falling profits around and return to the FCUK glory days of the 90s - results posted this week show they have managed a modest return to profit which will no doubt help in their current search for a buyer, but does it signal a return to glory?
Unfortunately no - not when you explore the products’ performance in more depth and the all-important direct to consumer retail channels.
The results are definitely a mixed bag therefore in this post I’ll be taking a deep dive into the state of French Connection using Mallzee Insights customer opinion data and showcasing how the brand has performed with consumers since we last looked at them in October.
Mallzee Insights is based on millions of customer opinions on French Connections products highlighting what shoppers actually think about their products and the overall brand performance, compared against direct competitors.
The graph below illustrates how French Connection products have performed with consumers over the past year, compared with the average performance of retailers in the UK market. The Mallzee Performance Score (MPS) is based on how consumers interact with products on the Mallzee app and is the total percentage of positive interactions on a product.
French Connection MPS Versus The Industry Average
As we can see, the French Connection brand hasn’t performed well with customers over the last year, consistently underperforming compared to the UK fashion market overall. What the graph does show is an increase in French Connections performance last summer which peaked above the industry average in August (thus our cautious optimism last Autumn). Sadly this optimism appears to have been premature as there has been a dramatic decrease in popularity driven by the release of their AW19 collection.
This performance curve is also mirrored by the share price performance of French Connection - although this lags a few months behind the real time performance, as it takes time for the sales results to filter through to the market.
French Connection - Share Price
This means we can clearly see that the share price started low at the start of the year and gradually picked up based on a strong late SS18 collection only to drop dramatically in December 2018 and has remained at around the ￡30/40 ever since, after the MPS scores dropped back to a level similar to the start of the year.
This weeks results have resulted in a small bounce - the stock market no doubt reflecting the increased likelihood of a potential sale and small profit but it’s still significantly lower than when the product performance was stronger, post strong summer performance
How consumers feel about a brands products is the most important element for success for fashion companies but can often be lost in a focus on innovation or brand value, product beats all!
If people don’t like the product they don’t buy, brands then have to discount and the business in turn drops in value.
Getting a brands product selection right in this day in age is crucial to success and it will be key for French Connection going forward, either in the hands of new owners or in its current incarnation. Understanding why consumers liked the late SS18 collection but disliked the AW18 one and making sure the next collections are received positively is critical.
Mallzee Insights helps brands and retailers improve profitability through pre-release product testing, our unique approach to data collection helps retailers to understand what’s going to work for their audience before they commit to costly stock orders. With over 3m products tested to date and over 500m customer opinions generated. Mallzee Insights is the largest database of consumer fashion opinion in the UK and is a key profit driver for a range of brands and retailers.