French Connection has benefitted from more favourable exchange rates in the three months to October 30 with overall group turnover up 8%.

In the sixteen weeks to November 24 the fashion retailer said sales in its UK and Europe retail division grew 0.6% in total and 0.3% on a like-for-like basis.

Womenswear continued to perform stronger than menswear and it said that its Toast fascia and ecommerce business were showing “encouraging” increases in revenue.

French Connection said that menswear and its operations in North America and Japan remain challenging.

In North America like-for-like sales were down 4.7% for the sixteen week period and as previously announced it will shut its business in Japan by the end of February 2010, with the cost of closure expected to be less than £0.5m. It added that “further initiatives resulting from the board’s on-going strategic review are in the process of development”.

Gross margins for the group are continuing to be impacted by the strength of the US dollar which has pushed up product costs and have also been impacted by three new outlet stores.

Wholesale in the UK and Europe, which accounts for 16% of group turnover, was down 11% for the period and gross margin for its wholesale business also continue to be affected by the strength of the US dollar. Forward orders for Spring/Summer 2010 are also below last year’s levels.

At the end of October French Connection had net cash of £15.4m, compared with £20m the year before. The reduction in cash was impacted by its trading results but it added that October was one of its low-points for the cash year and it would build cash reserves through the busier Christmas period.