French Connection reports loss for fifth year in a row
More bad news for retail. According to this Reuters report the French Connection has reported their fifth straight years of losses.
An activist investor urged struggling British fashion retailer French Connection Group Plc (FCCN.L) to split itself or spin off its Toast brand, after the company posted its fifth straight annual loss on Tuesday.
Gatemore Capital, which has been mounting pressure on French Connection since July, said the company should consider separating its retail and licensing businesses among other options.
The investor urged the company in January to split the role of chairman and CEO and called for an outright sale.
French Connection, which made a name for itself selling FCUK branded clothes, has been struggling to fend off competition from fast-fashion rivals such as ASOS Plc (ASOS.L), Forever 21 and Inditex’s (ITX.MC) Zara.
Gatemore’s managing partner, Liad Meidar, said on Tuesday the firm would still prefer a sale of the company.
The investment firm, which owns an 8 percent stake, estimated French Connection to be worth 80 million-100 million pounds ($97 million-$121 million).
The company’s current market value is about 33.4 million pounds.
Apart from Toast, French Connection owns the Great Plains and YMC brands. The company was not immediately available for comment.
French Connection has closed stores and hired new management and design teams as it tries to return to a profit.