High street as tough as ever as H&M and French Connection post disappointing sales

But away from the catwalk, the environment for fashion retailers remains as tough as ever.

The budget fashion firm Hennes & Mauritz said sales growth missed forecasts in February, despite a pick up due to price cuts that are expected to dent its quarterly profit.

H&M, the world’s second-biggest fashion retailer after Zara owner Inditex, warned in late January that markdowns to shift winter stocks, after unusually warm weather in key markets, would hit December to February results.

Sales in February increased 10 per cent in local currency terms from a year earlier. H&M’s growth in sales was 7 per cent in January and 10 per cent in December.

Meanwhile, French Connection Group has reported a bigger full-year loss, citing disappointing sales of its spring and summer collections.

The company said it would not recommend a dividend as it plans instead to preserve cash for its long-running turnaround programme.

Shares fell as much as 11 per cent to their lowest in more than two months.

French Connection has closed dozens of stores since embarking on a major programme to restore its ebbing popularity on the high street.

Chairman Stephen Marks said the company’s full-year performance had been disappointing due to “the very poor first half” but that sales had since improved.