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.


Etihad tells pilots they can join rival Emirates on secondment

Updated 30 min 20 sec ago
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Etihad tells pilots they can join rival Emirates on secondment

  • Etihad Airways has told its pilots they can join rival Emirates on a temporary basis for two years
  • The agreement is also likely to help Emirates, where a pilot shortage forced it to cancel some flights this summer

DUBAI: Etihad Airways has told its pilots they can join rival Emirates on a temporary basis for two years, according to an internal Etihad email seen by Reuters, as the downsizing of the Abu Dhabi carrier’s operations helps fill a pilot shortage for Dubai’s Emirates.
Etihad, which last week reported a $1.5 billion annual loss, has been overhauling its business since 2016, replacing its top executive, dropping unprofitable routes and shrinking its fleet.
The agreement is also likely to help Emirates, where a pilot shortage forced it to cancel some flights this summer. Management had said the shortage was a short-term issue.
In the email, Etihad said pilots who join Emirates on a two-year secondment would be placed on a leave of absence, retain seniority at Etihad, and receive their salary and full benefits from the Dubai airline.
Pilots were asked in the email to register a non-binding expression of interest and told that Emirates’ recruitment team would meet with pilots at Etihad’s offices.
Two sources separately told Reuters that Etihad had emailed staff announcing the agreement with Emirates.
An Etihad spokesman told Reuters secondment programs were common practice among airlines, enabling the effective management of pilot resources.
“This is something Etihad Airways has done for several years with partner airlines around the world,” the spokesman said.
An Emirates spokeswoman told Reuters the airline was “working with Etihad on a secondment program for some of their pilots.”
It was not immediately clear how many pilots would be offered temporary employment at Emirates and the email stated that any pilots applying for the secondment would need to complete Emirates’ training program.
Etihad employs 2,200 pilots, according to the airline spokesman. Reuters reported in January that Etihad had offered up to 18 months unpaid leave to pilots.
Emirates and Etihad have been exploring closer ties and signed a security pact in January, the first agreement between the United Arab Emirates (UAE) based airlines. Emirates has since said that a closer relationship was not about a merger.
Emirates and Etihad, backed by their state owners, have competed developing global networks from their respective hubs in Dubai and Abu Dhabi that are just 128 kilometers apart.
Emirates is owned by the government of Dubai, and Etihad is owned by the government of Abu Dhabi.