Despite the credit crunch, women’s ‘sense of entitlement’ to little luxuries for themselves continues to grow, according to Money Matters research from IPC Media’s Origin Panel. However, profits on the High Street are telling a different story and one brand that isn’t fairing so well in French Connection.
French Connection Group this week reported pre-tax losses of £3.5 million in the six months to July blaming smaller margins and rising costs for the “disappointing” results.
Earlier this year, the High Street fashion brand reported a 22.5 per cent fall in full-year profits blaming a “considerably more challenging retail environment” in both the UK and US.
Stephen Marks, chairman of French Connection, has said previously said that the brand will continue to strive for growth based on its “evolving fashion-forward products”, something that has got the brand this far in the High Street struggle.
The fashion brand is no stranger to hardships. The brand made headlines in 1997 with its controversial acronym, FCUK, that bares similarity to a certain naughty word and became an instant cult success.
It’s t-shirts containing the famous FCUK acronym bore line such as “fcuk this”, “hot as fcuk” and “too busy to fcuk” caused a public outcry in the late ninties with parenting groups.
The shirts were a far cry from the unique designs of its star designer Nicole Farhi – who now has fashion lines available in Harrods.
It’s second bout of controversy came when the fashion brand, which has been around since 1972, launched a Fashion vs Style advertising campaign in February 2006.
The ad, directed by Duncan Jones, son of David Bowie, featured lingerie-clad women in the roles of Fashion and Style fighting. It received between 121 and 127 complaints in the first week of being broadcast. Previous advertising from the brand containing the acronym FCUK had also received complaints resulting in the Advertising Standards Authority banning a number of campaigns and forcing the company to submit all posters for approval before running them.
But despite its advertising, which is now product led, the brand has been on a downward trend since 2005, with many analysts feeling that the company hasn’t reacted quickly enough to changing fashion tastes.
Could what used to be innovation in fashion now be too costly for consumers?
The British Retail Consortium has said previously that UK retailers are seeing consumers cut their spending “in earnest” in response to the credit crunch.
Perhaps consumers are looking for more basic fashion ranges that will last more than one season driving the pounds a little further?
Money Matters found that women’s spending on must-haves such as rent and utilities has increased and although two out of three women are worried or nervous about the British economy, that hasn’t necessarily led to them curbing their spending in all areas.
Two thirds of women are in debt, with the average being almost £10,000 and taking on estimate five years to clear. It’s not news that most of us now spend beyond our means, but we are now also spending more than we are actually earning.
Keeping up with the latest fashions ranks pretty highly on women’s priority list. And it’s no wonder – it’s fashion magazines, shop windows, media in general and Oxford Street that are making us feel inadequate.
While some High Street brands such as French Connection are suffering though – cheaper retailers such as Primark that offer cheap and up-to-date fashion are doing remarkably well.
Sales and profits at the retailer are expected to come in well ahead of last year, up a minimum of two per cent.
In a credit crunch, those offering us fashion that is cheaper – things we won’t mind to bin come next year and a new fashion trend – are undoubtedly going to do better. And although higher end High Street stores maintain their cost is a reflection of their brand value and quality, it won’t convince consumers to whittle away what little money they have.
