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French Connection cautious despite retail sales lift

French Connection saw retail like-for-like sales rise 1% for the 16 weeks ended November 25 but the young fashion company said it was cautious about the outlook given the recent volatile nature of the UK high street.

French Connection's total sales fell back slightly on last year but UK and European retail sales, which represent 49% of group turnover, grew by 3.7% over the period. Womenswear has continued to perform strongly but menswear performance remained weak.

However, French Connection said that in recent weeks, UK and European retail sales performance had become "weaker and considerably more volatile."

French Connection said that its UK and European wholesale business, which accounts for 21% of group turnover,was below last year's levels reflecting the conversion of some of its wholesale business into concessions and lower in-season ordering from its stockists. It said that spring 09 orders remained broadly flat against spring 08 orders.

Separately French Connection said its North American retail business, which accounts for 14% of turnover, had deteriorated since the first half, reflecting to downturn in the UK market. Retail sales in dollar terms fell by 12% and 10% on a like for like basis. Margin was also impacted.

US wholesale sales, which account for 8% of turnover, will be below last year for the second half as US retailers look to delay delivery of new product in anticipation of extended Sales periods post-Christmas.

French Connection said in a statement: "As with many retailers, the Christmas trading period is key to our results for the year and the significant downward trend in sales in recent weeks indicates that we should be cautious in our expectations, despite a good start to the period in UK/Europe retail."

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