French Connection relies on e-commerce for annual profit
07 February 2011 - 12:05 by Sarah Collinson
Fashion retailer French Connection has reported that its profits have leapt significantly in the last 12 months, as a result of branching out is products into more retailers who offer safe shopping online.
The news of its pre-tax profits hitting almost £7 million come a year after it only just secured £1 million as a result of falling customer numbers at its own high street outlets.
The main reason it has been able to pull further into profit is that it has got a deal with online retailer ASOS, so that it can sell its clothes via its site, with the e-commerce firm buying them at wholesale prices and then getting on with all the transactions and deliveries, so that French Connection can focus on its bricks and mortar shops.
While online sales are on the up and up for the firm, a further six per cent decline in high street sales has shown that even loyal customers are more likely to buy products from the internet than in store.
French Connection spokesperson, Roy Naismith, said that its partnership with ASOS was helping it to reach a new audience which would otherwise be unavailable to it. He also said that the firm was having to adapt to the new environment provided by an e-commerce organisation offering simple, safe shopping online.
French Connection is just one of the many retailers operating in the UK which are preparing to feel the pinch as consumers tighten their purse strings and get ready for the impact of the cuts and the resultant increase in prices for essentials like food and fuel.
Despite the relatively pessimistic atmosphere, French Connection was able to increase its share price as a result of the positive profit figures which it posted last week.