French Connection has conceded that it is underperforming in an already depressed UK consumer market, but insists it will use the experience to build a stronger business.

In the year to the end of January, group turnover fell 1 per cent to £265.7m. UK retail turnover fell 5 per cent to £110.6m, despite a 15 per cent increase in total selling space, with a like-for-like decline in sales of 12 per cent. Pre- tax profits fell 15 per cent to £32.3m.

In the first five weeks of the current financial year, like-for-like sales of the new season ranges are down by 17 per cent. French Connection chairman Stephen Marks said: "For the first time in nine years our growth record was interrupted by a disappointing trading performance in the second half of the financial year. We have learnt lessons from this and feel confident that we will use this experience to return to our growth track and build a stronger business for the future."

"The key to our success has always been the strength of our product design and the aesthetic of its presentation in-store. We are working hard to ensure that we can meet our customers' expectations in these areas."

The company said sales had been 'directly affected' by an over-emphasis on product lines that had been successful in previous seasons at the expense of more fashion-led products. In response, the retail buying teams have been strengthened, with new products to be introduced over the next few months to strengthen the summer ranges.

Seven new French Connection stores were opened, as well as six acquired from franchisees. The business also opened four Nicole Fahri concessions in House of Fraser department stores.

On current trading the company said that new additions to the ranges have provided some indication that we will see an improvement over the remainder of the season. Four new French Connection stores will open in the UK and Europe, and wholesale orders for summer 2005 in are broadly in line with last year in the UK and Europe, and well ahead in North America.