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Last Updated: Wednesday, 16 May 2007, 14:45 GMT 15:45 UK
Fashion chains hurt by weak sales
French Connection store front
Analysts were disappointed by French Connection's latest update
Two of the UK's best-known clothing retailers, Next and French Connection, have come under pressure after their recent sales disappointed investors.

Shares in French Connection closed almost 8% lower, while Next saw its stock slide 6.4%.

Both companies, once darlings of the fashion-conscious shopper, are trying to bounce back after some tough years.

While there are some signs of recovery, many rivals are doing better and are a better investment, analysts said.

Volatile times

Trade has been extremely volatile
Next statement

French Connection said that its sales growth was less than many analysts had expected.

According to the company, sales at its UK and European retail division rose 3% in the first 13 weeks of the financial year.

Optimism about the strength of the sales had seen the company's shares climb 8% in the previous two sessions.

"Despite a promising start to the year, the current statement points to a disappointment," Numis Securities wrote in a note to clients.

Next, which has more than 400 shops and a mail order business, said that its like-for-like sales fell by 2.7% in the 15 weeks to 12 May.

"Trade has been extremely volatile," the company said, adding that a good Easter was followed by a very disappointing first two weeks of May.

The performance was "disappointing given how well some of its competitors fared," said Richard Ratner, an analyst at Seymour Pierce.


SEE ALSO
UK retail sales slow during April
08 May 07 |  Business
Inflation slows to 2.8% in April
15 May 07 |  Business
Bank still sees inflation risks
16 May 07 |  Business

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