French Connection warns on profit

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Fashion retailer French Connection has issued its second profits warning in less than three months.

The company said that it expects profits for the year to 31 January 2012 to be just £4.7 million following poor trading over the Christmas period.

In November, French Connection warned that retail sales were running 9.5% lower than in 2010, leading analysts to cut forecasts to about £7.8 million.

In a statement French Connection said: "Trading in our retail stores in UK/Europe was disappointing in the early part of the autumn/winter season and this continued through the Christmas trading period.

"The effect of this has been to negate the growth in like-for-like sales achieved in the first half of the year and to cause the gross margin to be lower than expected."

However the company said wholesale deliveries in the second half of the year had 'shown good growth' with forward orders for the Spring/Summer season 'ahead of this time last year'. It said its international operations and brand licensing partners were continuing to perform strongly.

The company suffered losses in 2009 and 2010 but returned to profitability last year following a restructur and the sales of its Nicole Farhi brand.

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