French Connection

15 March 2016
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Preliminary results for the year to January 2016 published 15 March

Summary: An improved set of figures following last year’s awful interims. However, the numbers do suggest FCCN experienced a weaker Christmas while the cash pile really can’t afford another £9m outflow. Online sales were miserable, too. Still, Retail gross margins during H2 were the highest since 2011 and new board members may well help the moribund management. This value investment still requires inordinate patience… and I continue to hold. 

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30 November 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Trading statement published 30 November

Summary: Phew! A pleasantly surprising update that revealed stable trading and a signal that losses could be narrowing. However, the most welcome news was the redevelopment of the group’s loss-making Regent Street store, for which compensation of £2.4m will be received from the landlord. I just wish FCCN could be paid off for all of its under-performing shops! I continue to hold.

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21 September 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Interim results published 21 September

Summary: A grim set of figures that had been flagged by an earlier profit warning. News of further store closures and maintained gross margins were reassuring in the circumstances, but the real saving grace was the relatively positive outlook for the second half. There’s still a chance this share could one day prove to be a bargain, but for now its basket-case status remains intact. I continue to hold.

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Today I’m summarising my current thoughts on French Connection (FCCN), a small-cap fashion retailer that continues to suffer from poor trading and which remains an under-whelming investment in my portfolio.

You can read my earlier Blog posts on FCCN here. But to cut to the chase, a trading statement in April owned up to weak retail sales and it’s likely the current year will witness FCCN’s seventh overall annual loss in eight years.

One day I’m sure a sustained turnaround here could deliver an exceptional share-price gain — although there is the real chance this company may never actually turn…

Anyway, prompted by FCCN’s share price falling steeply of late, I’ve weighed up the various pros and cons of what has become a very frustrating business and investment. Just to confirm, I continue to hold the shares.

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24 April 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Trading update published 24 April

Summary: Profit warning — poor H1 Retail sales will mean greater-than-expected group losses this year. However, the profitable Wholesale and Licensing divisions continue to perform as expected. Turnaround possibilities remain, but the protracted wait has become just that bit longer once again. What’s needed now is some radical management action. I continue to hold. 

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17 March 2015
By Maynard Paton

Quick update on French Connection (FCCN).

Event: Annual results published 17 March

Summary: Mixed results. The Retail division was subdued, and gave a disappointing second-half performance. However, trading at the Wholesale and Licensing divisions appeared promising. There was further welcome progress on cost cutting, too. This turnaround has still to really turn, and I’ve trimmed my recovery assumptions. But the upside potential remains sizeable. I continue to hold. 

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08 January 2015
By Maynard Paton

Today I am going to explain why I believe the shares of French Connection (FCCN) can one day triple my money.

Before you become too excited, let me say that my average buy price here is 31p — as compared to the recent market price of 55p.

Nonetheless, I believe there is still good upside to be had and I reckon the shares could trade above 100p if all goes to plan during the next few years.

However, this £53m fashion chain is by no means a one-way bet.

In particular, the group’s track record is extremely haphazard and I would not rule out further setbacks occurring. A quality buy-and-forget investment it is not.

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08 January 2015
By Maynard Paton

Last May I attended the French Connection AGM. I wrote a short report about it on the ShareSoc website and thought I’d reproduce the review here.

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