French Connection high fashion after new forecast

Shares in fashion retailer French Connection soared yesterday after it said profits would be higher than its previous expectations in spite of the tough conditions on the high street.

The company said pre-tax profits will be least 6.8 million in the year to 31 January, comfortably ahead of City forecasts and previous company guidance that profits would be between 2.6m and 5.1m.

The profits surge is down to wholesale outlets and licensing, while its own stores, which account for about 55 per cent of revenues, have performed in line with previous guidance in November, when sales were down by almost 8 per cent.

The group posted bottom-line losses of 24.9 million in the previous year but restructured the business by taking measures including the sale of the loss-making Nicole Farhi brand and the closure of its Japanese business and some stores in North America and Europe.

The shake-up left French Connection with its UK and European retail and wholesale operations, the Great Plains wholesale-only ladieswear range and Toast, its mail-order fashion and homewares brand.

The shares rose 23 per cent or 15.75p to 84.75p as analysts upgraded their forecasts for this year and next. Andrew Wade at Numis Securities raised his profit forecast for the year to January 2012 from 7.5m to 8.2m.