Like-for-like sales at French Connection fell 3 per cent in the first 14 weeks of the second half of its financial year.

Sales at French Connection's UK and Europe retail divisions rose 1 per cent, but revenue for the wholesale business remained behind last year’s levels.

Although womenswear and the Toast brand showed improvement, the retailer said it remained “cautious” about the last quarter of the year after lower-than-expected sales in August and October.

French Connection said its balance sheet had a net cash balance ofÂŁ26.4 million, down fromÂŁ27.7 million in 2006. The fashion retailer said it was on target to make a profit for the year but, to reach the same profit levels as last year, it would rely on improved trading conditions over the coming three months.

French Connection’s North American sales were up 10 per cent in dollar terms, with like-for-likes also hitting double-digit levels.

Last month, Baugur upped its stake in the fashion retailer to 20 per cent, but denied that it would make a bid for retailer.

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