French Connection cuts jobs as shares plunge

Published on Thursday 17 September 2009 21:44

SHARES in clothes retailer French Connection slumped again yesterday after it disclosed losses had doubled at the half-way stage.

The group said it had responded to the trading deterioration by cutting 50 jobs at its main offices in London, New York and Hong Kong.

French Connection has also shut its business in Denmark and Sweden, with the loss of five stores and concessions.

The retailer, which had already suffered a chronic share price plunge linked to an extended period of poor performance, made a pre-tax loss of 12.8 million in the six months to the end of July. A year earlier the shortfall was 5.4m.

Shares in French Connection closed down 13 per cent at 50p. Their 52-week low was 29p.

However, there was cheer from the UK and wider European business, where like-for-like sales rose 2 per cent due to a resilient performance from ladieswear and online sales. Menswear has continued to struggle.

French Connection is undertaking a strategic review of what other measures may be taken to stem group losses.

The company has been savaged by the recession, which compounded existing trading woes. The business has failed to lure back consumers tired of its FCUK brand in recent years.

Stephen Marks, group chairman, said: "Our business continues to be severely affected by difficult retail environments in all of our markets around the world."

Underlying savings of 9 per cent – or about 4m – were made in the first half.

The group said wholesale customers had also curtailed their buying budgets and the division's sales were likely to fall 5 per cent in the second trading half.

Analysts at Numis Securities upped their forecast for full-year losses from 10m to 15m.