French Connection has admitted that its latest annual results "did not progress as we would have liked" as it unveiled a 23% fall in full-year profits.
French Connection also expects a difficult 2008
Blaming a "considerably more challenging retail environment", it made a pre-tax profit of just £3.1m in the 12 months to 31 January 2008.
Turnover at the fashion chain fell 2% to £236.1m from £241.3m a year earlier.
French Connection said the continuing difficult economic environment would likely impact on its 2008 performance.
'Striving for growth'
"We will continue to strive for growth based on our constantly evolving fashion-forward products," said chairman Stephen Marks.
"Further, for the first time in two years, we are seeing some improvement in the wholesale orders in both UK/Europe and North America.
"The final outcome, however, will depend on the general retail environment in our markets."
French Connection's comments come a day after the British Retail Consortium said UK retailers saw consumers cut their spending "in earnest" in February.