French Connection struggle to stay profitable

A savvy advertising and marketing campaign wasn't enough to save French Connection from another blow as the ailing retailer reported profits fell from £7.3m to £5m for the year to 31 January. Whether or not the product is competitive

and relevant in comparison to the British high street, FCUK's store sales also took a tumble, as the company faced losses due to higher production costs and cut margins to maintain sales.

Founder and chief executive Stephen Marks said it had been the most difficult winter season he had seen during all his years in the business adding that the company was taking action to improve the performance of its UK operation.

Marks said: "We are very aware that there will be no quick solutions and that changes we make will take time to have an impact.

"We are working very hard on improving the performance of the retail stores, although clearly the state of the UK economy is not helping the position."

French Connection's wholesale division performed better, citing a 17% increase in revenue on last year. Operating profit in the USA was £3.3m, also an improvement over previous years.

The company is planning further expansion of its international operations in the coming year and will launch a range of premium womenswear this spring.

Marks stated: "I expect that the UK retail environment will remain subdued over the next twelve months and we are planning accordingly. We will, however, continue to work hard to improve our financial performance."