French Connection will run out of cash in coming months if current trading levels continue and it cannot secure additional funding.
Sofie Willmott, Lead Retail Analyst at GlobalData, a leading data and analytics company, offers her view on this news: “French Connection was struggling before the COVID-19 pandemic hit, but with the outbreak significantly impacting demand for apparel and accelerating changes in consumer shopping habits the outlook is now even more bleak for the premium retailer. Although it has seen UK and US online sales climb 44% in the past six weeks this will not be enough to make up for stores being closed, with the online channel only accounting for around a quarter of revenue prior to COVID-19. In addition, FY2019/20 online revenue fell 8.1% (to end January 2020) highlighting that its strong digital performance is coming from a low base and is not as impressive as it first appears.”
“French Connection’s brand desirability has continued to dwindle as designs lack originality, and therefore struggle to excite shoppers or justify premium price points. With its close competitor Reiss far outperforming (pre COVID-19) and French Connection failing to find a buyer, after being for sale for a significant period of time, it raises the question once again whether French Connection can rebuild relevanceas it will fail in the post COVID-19 market if product, pricing and branding remain unchanged.”