[London] Stephen Marks, chairman-chief executive of French Connection Group, is living proof that sex sells. He has made a fortune out of exploiting the innuendo in his company's initials, FCUK. The tag-turned-global-ad-campaign, still risque despite the transposed letters, has been complemented by Mr. Marks' strong leadership, as well as the design and quality of his merchandise and stores.
"FCUK is his baby," says Paul Smiddy, a leading U.K. retail analyst at Robert W. Baird & Co. Mr. Marks "gave it its ethos and culture. He's a creative guy."
He also keeps to himself, refusing to give interviews and shunning the financial community even though the stock price of Mr. Marks' company has almost doubled in the last year.
"He's happier schmoozing with Trevor Beattie [chairman-creative director of Omnicom Group's TBWA, London] than with bankers," Mr. Smiddy says. Nick Bubb, retail analyst at Evolution Beeson Gregory, refers to the executive as "the famously irascible and grumpy Stephen Marks. He's touchy when people question him, and he doesn't suffer fools gladly because he's very knowledgeable."
Mr. Marks' first love was tennis, but to make a living he turned to fashion, working for a mass-market coat company in the 1960s and starting French Connection in 1972. Mr. Marks, now 58, took the company public in 1984 and still owns 52.4% of the stock. Two years later, he hired Nicole Farhi as his designer. The pair were an item for 15 years and have a grown daughter.
Mr. Marks' first order was for 2,000 cheesecloth shirts, half long-sleeved, half short-sleeved. The Hong Kong manufacturer took him literally and provided 2,000 shirts, each with one long sleeve and one short sleeve. Undaunted, he got out the scissors and sold them all as short-sleeved shirts.
For 25 years, FCUK was merely shorthand used in faxes between French Connection's Hong Kong (FCHK) and London offices. Then TBWA's Trevor Beattie spotted the sensational marketing potential of using those initials in ads and branding.
The duo cooked up a provocative and distinctive campaign that dramatically pushed up the retail chain's profits as sales soared from $171 million in 1998 to $411 million in 2002. Operating profit was up from $15 million to $46 million for the same period. FCUK now boasts 1,500 outlets in 25 countries and has expanded beyond clothing into toiletries, sunglasses, watches, housewares and, most recently, fragrances with an international "Scent to bed" campaign. The brand was introduced to the U.S. in 2000.
Even Mr. Marks' hobbies are profitable. He backed the U.K. hit film "Lock, Stock & Two Smoking Barrels," directed by Madonna's husband Guy Ritchie, and was the second-biggest shareholder in the Hard Rock Cafe when the restaurant chain sold for $400 million. His stake in French Connection is estimated at $273 million. First-half 2003 sales at French Connection grew 11% over the previous year as interim profits rose 33%.
The big challenge now is to crack the U.S. market. In 2003, FCUK fell afoul of the American Family Association and Federated Department Stores, the parent of Macy's and Bloomingdale's, after complaints about the name (FCUK Him and FCUK Her) and raunchy ads for the FCUK fragrances. Sales were temporarily suspended, but Mr. Marks has always stood by the campaign, which he believes is right for the target audience.
"You win and lose from controversial advertising," says Mr. Bubb. "It may work for them in the U.S. eventually."