When picking over the bones of that announcement, some analysts have claimed the business is struggling to compete against some of the discount fashion stores.
In that respect, French Connection is not alone. There is certainly a shake-up taking place in the lower reaches of the fashion retail sector, and the effects of this are now being felt further up the value chain.
Mintel's recent report on the state of the value fashion sector made interesting reading. The non-specialists, including the supermarkets, have taken 3% of market share from the specialists since the last report three years ago. That may not sound like a huge amount, but it is the way they have managed it that is key. In the case of the supermarkets, it was by undercutting the price points of even the traditional bargain-basement fashion retailers.
The advent of the £4 supermarket pair of jeans epitomises the manner in which the new players strode boldly into this market.
The reaction of many of the established players has been to avoid confrontation.
After all, who wants to take on the sheer scale and buying power of the supermarkets? The decision appears to have been made not to take them on at their own price-led game. And the result? A number of value fashion retailers trying to take their product offerings that little bit further up the value chain and away from the supermarkets. As evidence of this, I read recently of value retailer Peacocks' intention of avoiding the bloodbath of competitive discounting by establishing its entry-level pricing above that of the supermarkets.
The decision of these retailers to aim a bit higher and to ramp up the fashion and trend-driven aspects of their offerings has come at an opportune time.
Increasingly, the British consumer appears to be much more comfortable with making purchases from the value end of the high street, mixing and matching them with more expensive purchases.
But as these value retailers move up the value chain, the effect has to be felt elsewhere - which brings us back to the analysts' comments about French Connection. The supermarkets' decision to enter the pool has set off a ripple effect which is now being felt much further afield. Now the mid-tier of clothing retailers - New Look, Next, French Connection et al - are feeling that effect.
Traditionally, their domain has been well-defined. They would admit they couldn't quite command the premium prices of a Ted Baker, for example, or some of the big department stores. However, at least the tier of retailers beneath them was firmly rooted in a much more basic product offering and so did not represent a major competitive threat.
That appears to be changing and they are under more pressure than ever before.
What this doesn't change is the need to get the product right. That's why you still get success stories even when consumer confidence and spending levels are at their lowest ebb. Somebody somewhere will still be getting the look, style and quality 100% right and laying claim to what reduced spending power still remains. You can talk all you like about price points, but if the product is not right, price won't even come into consideration in a shopper's mind.
The developments of recent months have blurred the boundaries of the old established tiers of fashion retailing. You may now rightly ask where 'value' retailing ends and the next tier begins. In some ways, does it really matter? Every retailer wants to give value to its customers, whether it sells products at £4 or £400. Success in this area will only ever be judged by the strength of product - and no retailer can afford to forget that.
- Helen Dickinson is head of retail at KPMG
30 SECONDS ON ... FRENCH CONNECTION'S ADVERTISING
- In the mid-90s FCUK was used as shorthand on fax heads in correspondence between French Connection Hong Kong (FCHK) and French Connection United Kingdom (FCUK).
- TBWA's Trevor Beattie devised the controversial FCUK campaign which has since had several run-ins with the Advertising Standards Authority (ASA).
- The first ban came in spring 1997 following 10 complaints to the ASA. The campaign relaunched that winter after a strategy change, which separated the acronym FCUK and the word advertising.
- The ASA banned the campaign again after a further 27 complaints.
- Last year FCUK lawyers were outraged when pro-fox hunting campaigner Otis Ferry, son of rock-star Bryan, invaded Parliament wearing a t-shirt with the message 'FCUK yer ban'.
- The lawyers wrote to Ferry, warning him that he had infringed its copyright and that action could be taken if he wore the offending garment in public again.