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French Connection Shares Dive On Sales Warning

The value of French Connection (LSE: FCCN.L - news) slumped 22% when share trading began on Friday after the company issued a warning on its sales.

The fashion retailer, which has been closing unprofitable stores and shaking-up its designs, said in a trading update that it expected full-year results to be below market estimates.

The company admitted the previous year's challenging trading conditions continued through Easter.

Retail sales, which account for about 60% of group revenue, were expected to be "materially" lower in the first half, the firm said.

It had reported a surge in sales a year ago following years of weak growth amid the challenge from online fashion brands.

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But French Connection was not immune from the warm autumn which hit the fashion chains' winter ranges last year.

It said it expected to close another seven stores during the current 12 months as its turnaround plan continued.

The statement added: "We have been putting in place many improvements across the business in the last two years and will continue to implement positive change across the Group."

The company reassured investors that wholesale revenue, which comes from its sales to retailers in 60 countries worldwide, was in line with expectations, with forward orders up year-on-year.

Its licensing business also continued to perform strongly.

French Connection shares had lost 30% of their value ahead of today's trading update.