High street icon French Connection urges caution

Published on Wednesday 26 November 2008 20:12

FASHION chain French Connection yesterday offered a cautious outlook for the financial year after it said the banking crisis had hit sales.

The group said a strong performance from its UK retail arm around August had given way to "weaker and considerably more volatile" sales in recent weeks.

Sales for the 16 weeks since 1 August across the UK and Europe, which accounts for nearly half of group turnover, rose 1 per cent on a like-for-like basis. However, this was offset by weaker sales in its US business and wholesale operations, with overall group turnover slightly below a year ago for the three months to 30 October.

French Connection said: "As with many retailers, the Christmas trading period is key to our results for the year and the significant downward trend in sales in recent weeks indicates that we should be cautious in our expectations, despite the good start to the period in UK/Europe retail."

The firm has been battling to revive sales in recent years as demand for its FCUK brand has waned, with the tough conditions on the high street adding to its problems.

Numis Securities retail analysts downgraded their forecasts for annual figures, now pencilling in pre-tax losses of 5 million, down from 1.4m.