French Connection warned of a £7m decline in profit yesterday as the beleaguered fashion chain was forced to cut prices to shift its summer ranges.
The chain, which warned in May that its full-year profit would miss market expectations, said sales between February and July fell 7 per cent as the cool, wet weather kept shoppers away.
It has begun a strategic review of its loss-making UK retail business and has plans to close some stores to reduce costs. It remained "very cautious" for the second half of the year but said it was working on new licensing deals.
Further bad news came in the shape of the US department store chain Sears scrapping a licensing agreement.
But it said "continuing revenue growth in North America" was "offsetting the decline in UK orders to some extent".
Analysts at Seymour Pierce cut French Connection's share price target to 20p from 30p. The shares have more than halved since the start of the year to 21p.