French Connection sees sales slump
SHARES in French Connection slumped today after the company admitted sales in its UK stores stores had been 'disappointing'.
The results, which will be closely watched by analysts fearing a slowdown in High Street spending, revealed half-year profits for the clothes retailer were up 12% to £15.4m.
But the improvement was largely down to healthy wholesale trading - as opposed to sales in its own shops - and a robust performance in Europe, North America and Asia. Turnover was up 5% from £122m to £128.2m. The shares tumbled 19p - more than 5% - to 353 1/2p in early trading.
The company said retail conditions in the UK had been 'unusually poor', with profits from stores in the UK and Europe down nearly 60% to £1.9m, compared with the strong first half performance of last year at £4.7m.
In line with comments from other retailers, French Connection said UK trading conditions during August had been 'unusually poor', although the outlook for the remainder of the business continued to be good. The results were in stark contrast to a 30% profits surge announced by Next Group today.
The fashion chain also said it was sticking with its FCUK logo despite criticism from within the industry.
'Contrary to recent press speculation FCUK continues to be an important part of our branding and we will carry on using it on our products, in our stores and in our advertising,' said chairman Stephen Marks.
The company also said it plans to open its first store in China next year.
