High street sales slip but French Connection still on recovery path

The group said like-for-like sales in its UK and Europe stores, which account for 55 per cent of revenues, declined by 6.1 per cent on a year earlier in the past 15 weeks, with total sales in the stores down 7.7 per cent.

In the first half of the year like-for-like sales were 3 per cent higher but French said weakening sales trends in womenswear impacted on its performance.

The group posted pre-tax losses of 24.9m in the year to January 31 but has pinned its turnaround hopes on a restructuring that has seen the sale of the loss-making Nicole Farhi brand and the closure of its Japanese business and some stores in North America and Europe.

The shake-up left French Connection with its UK and European retail and wholesale operations, the Great Plains wholesale-only ladieswear range and Toast, its mail-order fashion and homewares brand.

The business said the declining high street sales would be more than offset by growth in its wholesale business – selling clothes to other retailers and traders – and through cost savings and higher profit margins.

As a result, its full-year performance will be at the higher end of market expectations for pre-tax profits of between 2.6m and 5.1m.

Numis Securities raised its own pre-tax profits forecast from 2.5m to 5.3m following yesterday's update.

Analyst Andrew Wade added: "Despite a softer UK outturn, French Connection's core business looks to be firmly on the right track, with good product, a sharper focus on stock and costs, and menswear back into positive sales territory."

Next and New Look also reported declining UK like-for-like sales this month as cash-strapped consumers reined in their spending.

French Connection has 127 outlets in Europe, 111 in the UK.