Fashion retailer Oasis Stores has issued a profit warning as it posted poor Christmas sales.

The Oasis warning came as other clothes retailers gave their investors gloomy news.

The Arcadia retail group - the UK's second-largest clothes retailer, which includes Burtons, Dorothy Perkins and Top Shop - has warned investors that it will cut their dividends this year.

Menswear retailer Moss Bros saw sales fall 9.1% as it warned that its margins would be hit by falling prices.

Poor demand for clothes

While Oasis said total sales were up 12% in the 24 weeks to 15 January, like-for-like sales were flat, with the eight weeks to Christmas weaker than last year.

Full-year profits are now expected to be about £12.5m, lower than the forecast £15m.

Oasis said its sale, which started after Christmas, has progressed well and it will enter the new season with a clean stock position.

Tough time for menswear

Sales at menswear retail group Moss Bros fell by 9.1% in the 50 weeks to 15 January, with profit margins also depressed by falling prices.

The company said that pre-tax profits for the full year should not be less than £7.5m, a fall of 53% from the year-ago figure of £16.1m.

Arcadia said its gross margin, excluding new brands, was down 2.4% and warned that last year's dividend level was unlikely to be sustained.

Of its 15 brands, Arcadia said premium-priced Wallis and Principles have suffered from a double whammy of price deflation and popularity of casualwear but formal menswear was the toughest market.

Shares in Arcadia dropped 8% on the back of the news.

"The menswear story is horrific and costs are out of control," one analyst said.

Arcadia eyes the net

Arcadia is looking to reduce its dependence on high street shops by expanding new shopping channels such as the internet via its e-commerce arm ZOOM.

Chief executive John Hoerner said: "The ZOOM site has already given a real boost to Arcadia's e-commerce business and we are reaching hundreds of new customers every day through the internet."