French Connection issues new alert
Filed under: News
It is not expecting any respite from the challenging conditions responsible for a 12% slump in UK like-for-like sales over the last three months.
Founder and chief executive Stephen Marks said a review of the UK retail business was well under way but admitted that consumer caution and ongoing economic turbulence continued to affect the business.
He said: "We, therefore, remain cautious about the outlook for the rest of the financial year. Given this, it appears unlikely that our profit performance for the full year will meet current expectations."
Shares were down 15% on Thursday and have fallen by nearly 70% since October.
Numis Securities said the UK sales decline of 12% was much worse than its forecast for a fall of 2.5%.
While the performance was affected by the wet weather and comparisons with Royal Wedding trading last year, Numis analyst Andrew Wade said it was likely French Connection had underperformed against its rivals.
He added: "Over the last 15 years, UK clothing has become an increasingly competitive space, particularly at the fashion end, and any turnaround will take time to execute."
Mr Wade now expects the UK division to post a loss of £13 million this year and drive the overall group to a £500,000 deficit.
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