In the fickle world of fashion, brands fall in and out of style with alarming regularity. Driven by the relentless quest for what’s new, different or improved, shoppers are erratic in their loyalties – and labels that fail to keep up are quick to fall off the fashion radar.
A decade ago, British fashion retailer French Connection was riding high with an advertising campaign based around the FCUK logo. Not only did slogans like ‘FCUK Fashion’ court controversy and keep the brand in the public eye, but they helped transform a bland fashion line into something more edgy and controversial. And sales soared.
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But you can have too much of a good thing, and by the end of 2005 the fashion firm was scaling back the use of the FCUK logo as shoppers grew bored with its crude innuendos, and switched their focus to its rapidly-rising lower-priced competitors.
Five years’ on and the retailer is still struggling to get back on track, with full-year losses most recently widening to GBP24.9m (US$37.5m) from GBP16.4m a year ago.
And yesterday it added to an earlier decision to exit from the Japanese market by revealing plans to close most of its loss making operations in the US and sell its Nicole Farhi brand.
Whether French Connection can reposition itself remains to be seen. But there are surely lessons to be learned from Tommy Hilfiger, which was the label of choice for rappers back in the 1990s, but failed to keep up after fans moved on to newer, edgier lines.
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By GlobalDataSold for $1.6bn to Apax Partners in early 2006, the Hilfiger brand has been reinvented since being taken private.
The company’s corporate headquarters were relocated to Amsterdam; the business was divided into four independently managed units in the US, Canada, Europe and the Far East; and its sourcing operations were sold to Li & Fung.
Sales have since soared, both in Europe and Asia as well as in the US, where it has inked an exclusive distribution deal with Macy’s. Full year revenues for the 12 months to 31 March are expected to be $2.25bn, with earnings before interest and taxes of $280m.
The biggest seal of approval on its turnaround, however, is the $3bn buyout deal agreed with US apparel firm Phillips-Van Heusen (PVH).
Not only is this one of the largest ever textile takeovers, but it will create one of world’s largest and most profitable clothing companies. And it means Apax has nearly doubled its investment in just four years.
Phillips-Van Heusen will add Tommy to a stable of brands that includes Arrow and Izod as well as licenses for brands like Geoffrey Beene and Kenneth Cole New York. And with the backing of a global business with combined revenues of $4.6bn, its focus on international growth is seen as pivotal to the group’s future success.
The timing of the acquisition is helped by signs that shoppers are finally starting to spend money again – and proves that beleaguered brands can still come back into fashion.
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