High-street squeeze hits fashion retailer, which warns it expects £4.7m profit this year after disappointing Christmas trading
The high street squeeze, which has sent store chains including La Senza and Peacocks into administration in recent weeks, has forced another profits warning from fashion group French Connection.
The retailer has issued a second profit warning in three months, after savage discounting and reluctant shoppers depressed Christmas sales. It came in an unscheduled trading update last night, ahead of full-year results in March. The group said it now expects to make just £4.7m in profit this year, including a one-off foreign exchange gain of £700,000.
In November, French Connection warned that UK and European retail sales were running 9.5% lower than in 2010, prompting broker Seymour Pierce to revise its profit forecasts down from £10m to £7m for the full year.
The shares tumbled 15% to to 37p in the wake of the warning, but closed 1.28% down at 58p. A year of high street gloom has seen French Connection's share price more than halve since the year high of 134p in March 2011.
French Connection returned to profitability last year – after reporting losses in 2009 and 2010 – following a reorganisation which involved selling the Nicole Farhi brand.