Gamble of the week: A bargain fashion retailer

This fashion retailer is no stranger to the malaise on the high street. But if it can turn its fortunes around, the shares could be worth a punt, says Phil Oakley.

Most of us know that making money from selling stuff on the British high street is tough. Get your products and pricing right and you can do well. Get it wrong and you lose money and risk going bust. French Connection is firmly in the latter camp.

It is a brand that shoppers are aware of and it has at times been very popular. But at the moment it's just not selling enough products to make money, and doesn't look like it will do so for a while yet. It seems that shoppers may like its fashions but are not prepared to pay the full asking prices for them, and so wait for them to go on sale. This is not what you need when you have rents, staff and other fixed costs to pay. But if the management team can turn the business around, then losses can turn to profits quite quickly.

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Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.