Clothing chain French Connection delivered its second profits warning in eight months today after new ranges failed to draw in shoppers.
French Connection said its annual profits could be as low as £20m (€30m) – 40% below the level of 2004.
British wholesale customers stung by the poor retail outlook had placed a “very low level” of repeat orders for summer clothing, while French Connection said efforts to rejuvenate its ranges had not produced the level of sales that it had hoped.
Despite being in an area of aspirational fashion that analysts have touted as one of the most resistant to the spending slowdown, French Connection said like-for-like sales at its UK, Irish and other European stores were likely to be 11% lower in the six months to July 31.
Although same-store sales were expected to rebound in the second half and turn positive for the full year, the retailer said it now believed its annual pre-tax profits would be in the region of £20m to £25m (€30m-€37m).
This was below the £33m (€48.8m) pencilled in by analyst Paul Smiddy, of stockbroker Baird, and the £33m (€48.8m) reported by French Connection last year when its profits slipped by 15%.
Chairman Stephen Marks, who owns 42% of the company, said: “The CBI announced on Wednesday that the high street has witnessed the sharpest fall in sales volumes in more than 22 years.
“French Connection is not immune to this. We are encouraged by our strong collections, but the high street is very tough at the moment.”