French Connection's hopes of getting back in the black dashed by profit warning

French Connection’s hopes of turning three years of losses into a profit were shattered today as the fashion chain issued a shock profit warning, sending the shares tumbling 17%.

The retailer was tight-lipped about the reasons behind the collapse, only saying that its retail division’s sales will be “materially lower than expected”.

Analysts instantly switched their predictions of a £500,000 profit next year to expectations of a £3.5 million loss. The company last month revealed a full-year pre-tax loss of £800,000.

Retail analyst Freddie George at Cantor Fitzgerald called the warning “very disappointing” and suggested that the problems were down to weaker ranges in its stores.

He added: “Last year, the ranges looked a lot brighter — they had a lot of strong accessories and shoes — but that’s not there now.

“It has not been a great first quarter in the retail sector. Generally, apparel fashion has been weak in the first quarter and my hunch is that people are saying ‘we’ll buy a car, or do a bit on the house... instead of (spending on) fashion.’”

He said some of the problems could be down to founder and chief executive Stephen Marks: “He signs everything off but he’s just one person. You can get it right sometimes but you can also get it wrong.”