After seeing its shares drop by 20 per cent in March, and issuing a profit warning in April, French Connection managed to decrease its pre-tax losses from £6.1m to £3.9m in six months. Yet this slow pace has caused chairman Stephen Marks to admit that trading on the high street remains challenging.
This has been echoed by analysts such as Anusha Couttigane, senior consultant at Conlumino, who suggested that the company’s progress has been “disappointingly slow”. Furthermore, she claimed the retailer has been struggling to maintain the fashion credentials it established in the 90s.
This is in large part due to the controversial FCUK brand being dropped. The move resulted in Marks having to close down 14 UK shops in areas such as Bluewater and Lakeside.
George Scott, a senior consultant of the same firm as Couttigane, claimed that if French Connection didn’t pick up momentum it would lose its relevance and competitive footing.
“Over the years, its lack of investment in brand and product innovation has been exposed by fast-fashion rivals such as Topshop, Zara and to some extent ASOS, as well as the marketing pushes of mid-market peers such Reiss and H&M,” he said.
At a time when Marks claims the fashion brand has regained its confidence, it faces the departure of its FD. Marks had said French Connection would be going through a period of positive change, and Adam Castleton would bring the skills needed to take the business through this period.
Read more about FDs who recently stepped down:
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Castleton joined the retailer in May 2013 from O2, where he served as finance director of its business division. He also served as acting CFO of O2 UK, following previous roles at eBay, Polo Ralph Lauren and The Walt Disney Company. He will now be leaving to work at LSL Property Services.
He is set to take over from LSL’s interim finance boss Andrew Burchall, who stepped into the role in January after the departure of Steve Cooke to toy-maker Hornby. The company had announced plans to delist the business from the main market to move over to London’s Alternative Investment Market – it was suggested that Cooke would be key.
It is now LSL CEO Ian Crabb’s turn to say that Castleton is a “strong fit” and his “breadth of financial skills and experience” would be beneficial to the company.