Fashion retailer French Connection has announced closing down a number of its underperforming stores in the United States. The fashion retailer has also hinted at selling its Nicole Farhi brand as part of its restructuring plan, which, it says, will help it in making profits.
The economic downturn has had a severe impact on French Connection, which has been suffering huge losses since 2007, both in the United Kingdom and the United States. It will suffer losses worth $9.9 million as it closes down the US stores, though the retailer says, this will cut down on annual losses, thus helping it return to profitability.
It is expected to receive about 5 million pounds from OpenGate Capital for the sale of Nicole Farhi business, which has cost it 5.6 million pounds already as losses this year.
Giving hopes of a better future, the retailer group says the step will certainly be profitable and help generate cash.
Labour, Conservatives, and Liberal Democrats have questioned the timing of such retrenchment, which has come amid recession. With the recession still continuing, it remains to be seen how far pruning will help French Connection raise its head once again, though not much help seems coming from the economic front!
