UK fashion chain French Connection close to turning business around

One of French Connection’s London stores. The fashion chain has been approached by a US group about a potential takeover. (Reuters)
Updated 13 March 2018
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UK fashion chain French Connection close to turning business around

LONDON: British fashion chain French Connection Group said it was close to returning to profit and disclosed it had been approached by an unnamed US group about a potential takeover, although talks did not lead to an offer.
Shares in French Connection, which operates 116 outlets in Europe and North America, rose as much as 18.7 percent to 40 pence in morning trading.
“Our goal has been to return the group to profitability and I believe we are very close to achieving that aim, given the momentum that we are currently seeing within the business,” CEO Stephen Marks said.
French Connection said negotiations about a potential offer for the group had gone on for a number of months last year before they broke off.
Company founder Marks is the largest shareholder in the company, with a stake of around 41 percent. Mike Ashley’s Sports Direct International holds a 27 percent stake.
Activist investor Gatemore Capital last March urged the loss-making company to split itself or spin off its Toast brand, among other options.
Gatemore sold its entire stake in July, saying it was not satisfied with the pace of change at the retailer.
French Connection reported a 0.8 percent increase in like-for-like sales at its stores and said the retail market in Britain remained “particularly challenging.”
French Connection has been struggling to fend off competition from fast-fashion rivals such as ASOS Plc, Forever 21 and Inditex’s Zara. It has closed stores and hired new management and design teams as it tries to turn the corner.
It closed 11 outlets over the year.
“While it is clear that the retail market in which we are operating in the UK is unlikely to improve in the near future, we have clear visibility on the benefits we will obtain from the ongoing portfolio rationalization,” Marks added.
Underlying operating loss for the year ended Jan. 31 came in at £600,000 ($833,400), compared with a loss of £3.7 million in the prior year.
Revenue rose 0.5 percent to £154 million.


Mideast plays key role in Chinese export of armed drones, report says

Updated 17 December 2018
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Mideast plays key role in Chinese export of armed drones, report says

  • China has exploited America’s selective drone export policy to become an increasingly influential player in meeting demand
  • The report is entitled “Armed Drones in the Middle East: Proliferation and Norms in the Region”

BEIRUT: The use of armed drones in the Middle East, driven largely by sales from China, has grown significantly in the past few years with an increasing number of countries and other parties using them in regional conflicts to lethal effects, a new report said Monday.
The report by the Royal United Services Institute, or RUSI, found that more and more Mideast countries have acquired armed drones, either by importing them, such as Jordan, Iraq, Saudi Arabia and the United Arab Emirates, or by building them domestically like Israel, Iran and Turkey.
China has won sales in the Middle East and elsewhere by offering drones — otherwise known as UAVs or unmanned aerial vehicles — at lower prices and without the political conditions attached by the United States.
The report , entitled “Armed Drones in the Middle East: Proliferation and Norms in the Region,” said that by capitalizing on the gap in the market over the past few years, Beijing has supplied armed drones to several countries that are not authorized to purchase them from the US, and at a dramatically cheaper price.
“China, a no-questions-asked exporter of drones, has played and is likely to continue playing a key role as a supplier of armed UAVs to the Middle East,” it said.
The report explored where and how each of the states have used their armed drones and whether they have changed the way these countries approach air power. It found that Iran, the UAE and Turkey all changed the way they employ airpower after they acquired armed drones.
For Turkey and the UAE, armed drones enabled them to conduct strikes in situations where they would not have risked using conventional aircraft, it said. Iran developed armed drones from the outset specifically to enable to project power beyond the reach of its air force, which is hamstrung by obsolete aircraft and sanctions, the report added.
The report said it remains to be seen whether and how the loosening of restrictions on the exportation of armed drones by the Trump administration will alter dynamics in the region.
“Nonetheless, proliferation in armed UAVs in the Middle East is unlikely to stop and could, in fact, even accelerate,” the report said.