French Connection forecasts wider-than-expected loss and shares fall as discount delay back fires
Shares in the company fell 14 percent to 24.77 pence in early trading on the London Stock Exchange. The company's stock has fallen 25 percent in the past year.
The company, famous for its FCUK brand of clothes and accessories, said it expected an adjusted pretax loss of 7.5 million to 8 million pounds (about $13 million) for the year ending Jan. 31.
That is much bigger than the 5.47 million pounds loss analysts were expecting, according to Thomson Reuters I/B/E/S.
The British retailer, whose brand value is waning, is also battling aggressive discounting from online retailers in the United Kingdom and had previously forecast that it would post a full-year loss.
It reported a pretax profit of 5 million pounds last year.
French Connection said sales in its core retail business in the UK and Europe softened in the run-up to Christmas. Like-for-like sales in this business fell about 3 percent in the 24 weeks to Jan. 12.
The retailer said it delayed discounting during the key Christmas period by a week in an attempt to build brand equity.
The company carried out a similar delay in discounting in North America, where trading was disrupted due to Superstorm Sandy that hit the U.S. North East.
French Connection will report full-year results on March 13.
© Thomson Reuters 2013 All rights reserved.