IT’S an increasingly familiar story. A UK firm, starved of revenue at home, looks east to expand, hoping the growing middle classes in India and China will pick up where the British “squeezed middle” have dropped out.
French Connection’s position at the more expensive end of the high street means it may be able to hang onto the coat tails of demand for luxury and heritage British brands such as Burberry and Mulberry in expanding Asian economies – but has it waited too long?
By saying it’s pulling back from the UK, the company is ensuring all eyes will be on domestic operations for the next 12 months at least.
If it can juggle lease negotiations, price tweaks and getting the product range right at home while simultaneously expanding abroad, then perhaps next year will bring the profitability that Stephen Marks forsees.
But right now, we wouldn’t bet on it.