French Connection sales plummet 17%

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The Independent Online

Stephen Marks, the chairman of French Connection, insisted yesterday the fashion business had "bottomed out" after the new spring collection got off to a dire start with a sharp fall in underlying sales.

Stephen Marks, the chairman of French Connection, insisted yesterday the fashion business had "bottomed out" after the new spring collection got off to a dire start with a sharp fall in underlying sales.

The extent of the slowdown, which comes after November's profits warning, unnerved the City, prompting analysts to slash their profit forecasts. Shares in the company dived 11.75p to 304.5p.

Mr Marks, the founder and biggest investor, sought to quash speculation that the collapse in the group's market valuation could prompt him to take it private, in spite of the recent emergence of Iceland's Baugur on its shareholder register. "I have no interest in doing that at these sort of levels. We have not had a bid approach," he said. Baugur has bought 1.6 million shares.

The company said underlying sales at its retail stores fell by 17 per cent during February and early March. It is pinning recovery hopes on its spring and summer ranges after missing out on key fashion trends such as tweed pencil skirts.

The group's core retail arm slumped to an operating loss of £1.6m against profits of £11.1m the previous year. Group pre-tax profits were 15 per cent lower at £33m - the first fall for nine years. There were further signs of concerns from the group's wholesaling arm which is suffering from an "air of caution" among department stores after last year's poor Christmas.

But Mr Marks said: "I'm completely relaxed that we've got a big change in product and we're moving it in the right direction. We have bottomed out and are now starting to move forward."

The company used its £52m cash pile to raise its dividend by 54 per cent to 5p a share. The move netted Mr Marks, who still owns 42 per cent of the group despite selling 9 million shares last summer to fund his divorce settlement, £2m.

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