Baugur, which owns 14 per cent of shares in struggling retailer French Connection, has criticised the company's performance. A spokesman said: 'The results are disappointing. It was the first time the company has made a loss in 14 years but what's worrying is that both the wholesale and retail division performed badly.' Baugur is in prime position to buy the chain should its founder Stephen Marks sell his 42 per cent stake in the firm. Marks does not want to sell until he has turned around the firm, which last week posted a six-month loss of £3.6m on decreasing turnover of £111.2m compared with a profit of more than £5m in the same period last year. A spokesperson for French Connection said a turnaround was defined by ensuring the company was profitable.

French Connection sales soared on the back of the ubiquitous FCUK banner but the public has tired of this. Its clothes are considered well-designed but expensive for the mid-market, which has become increasingly competitive and price-driven. The company, founded by Marks in 1972, had issued five warnings to investors in 18 months, saying that profits would be lower than expected. It ditched its advertising agency, Beattie McGuinness Bungay, earlier in the summer after a poorly received brand relaunch campaign that featured a lesbian kiss.