French Connection has made a loss of £5.5m in the full year to January 31.
The fashion group said it has been largely affected by the downturn in the world economy, particularly for its US business.
Turnover rose to£248m from£236.1m the year before.
French Connection chairman Stephen Marks said: “The results for last year are disappointing and, to a large extent, are a reflection of the impact on fashion markets of the down-turn in the major world economies and in particular the US market.”
He added that its UK performance was improving with its domestic like for like sales ahead 2 per cent over the year. He also said that its womenswear offer was continuing to be well received by its customers.
Marks added: “Our balance sheet remains strong with net funds of£37.1 million at the end of the year. We are therefore able to focus on ensuring that our products and operations are as strong as they can be and appropriately structured to deal with the decline in our markets. We will continue to focus on creating great product but we are preparing for another difficult year.”
French Connection has also implemented review of its business which includes a cost saving programme in relation to its head office staff levels and discretionary costs.