French Connection cautious after sales weaken

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

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

Sales for the 16 weeks since August 1 across the UK and Europe, which accounts for nearly half of group turnover, rose 1% 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 October 30.

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.”

French Connection 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.

The firm overhauled its ladies’ fashion lines earlier this year and said it saw strong growth in sales of its womenswear collection and Toast mail order division in the UK since August.

But the group’s retail business in North America – representing 14% of group turnover – has fared worse, suffering a 10% slide in like-for-like sales in the 16 weeks to November 25.