French Connection will downsize its stores in an attempt to drive sales densities after it revealed first-half losses of £3.5 million.

The retailer, which reported last week that sales increased£3 million to£112.4 million in the six months to July 31, will review its store sizes subject to lease agreements and landlords’ approval.

Finance director Roy Naismith said: “Our aim is to increase density, reduce costs and achieve turnover. If we can increase sales densities by reducing footprint, then we will.”

The retailer has so far reduced the space in two of its stores and increased profitability as a result. The landlord at its 5,000 sq ft Jubilee Place store in London’s Canary Wharf has taken back 1,300 sq ft. French Connection has also given up one of the two floors it occupied at the Princes Square shopping centre store in Glasgow.

Naismith said: “We are keeping our eyes open for opportunities. In the majority of stores there aren’t those opportunities and it is difficult to tell where those opportunities will arise.

“As long as we have got 3,500 sq ft, we can show all of the range and get all of the options in.”

He added that the retailer’s store relocation in Bristol to the Cabot Circus scheme and its opening later this year in Westfield London will showcase the retailer’s latest shopfit.

French Connection has been hit hard by higher costs and the knock-on effect of the weakness of the pound because it sources much of its stock in euros and dollars.

The retailer is pinning its hopes on a turnaround by mirroring the success of its womenswear – which achieved a first-half like-for-like rise of 8 per cent in the UK and the US – with its revamped mens ranges, in stores from spring.

Despite forecasting that the economic situation will get “tougher”, Naismith said the six weeks since the year-end have been “encouraging”.