Sex doesn't sell for UK clothing chain

French Connection, the British retailer famous for its FCUK advertising slogans, has seen a further collapse in sales after its latest controversial campaign - a television advert featuring fisticuffs and lesbianism.

The violence and sexual imagery portrayed in the video that showed two women beating each other up before being soaked with water and then embracing has failed to entice customers back to the struggling French Connection's clothing stores. At its annual shareholder meeting, the group admitted that profits would again miss forecasts.

City analysts have slashed their profit expectations for the company for the sixth time since chairman and chief executive Stephen Marks raised £36.5 million ($109.75 million) from selling 9 million shares. Marks, who founded the company more than 30 years ago, raised the cash to fund his divorce settlement with his ex-wife, Alisa. The group's shares, which were worth more than £4 when he sold them, fell to 211p after its profit warning.

The two women fighting in French Connection's latest campaign, which is plastered over the side of London buses and taxis, are meant to represent a quote from Yves Saint Laurent, the French designer, who once said: "Fashion fades, style is eternal." The battle pits fashion against style; the reconciliatory kiss suggests that ultimately neither wins.

The ad was dreamt up by Trevor Beattie, the ad man who turned the retailer's FCUK acronym into one of the industry's most controversial campaigns.

Retail analysts blamed part of the recent sales decline on the campaign. Matthew McEachran, at Investec Securities, said: "I personally had no inclination to go anywhere near a store after I saw that advert. The video looked cheap and not very design-led." Nick Bubb, at Evolution Group, said: "It left me rather confused."

Despite the latest trading disappointment, executives at French Connection are understood to be pleased that the ad created so much fuss. If nothing else it has boosted the brand's profile after poor designs and high prices saw it fall off the fashion map. McEachran added: "The campaign has been a talking point and they regard it as a good starting point."

Marks said that trading over the Easter period "was difficult and did not meet our expectations". In the group's UK stores that have been open for more than one year sales have fallen by 2 per cent since the beginning of February. Sales of its summer ranges to department stores remained "subdued", while orders for its winter lines were 12 per cent below the level achieved last year, he added.

Despite being only weeks into its new financial year, which runs to January 2007, Marks said: "There is little indication at the moment that the market conditions or our trading performance will change." City analysts now expect the company to manage pre-tax profits of just £6 million, compared with the £38 million it made just three years ago.

The group stopped plastering FCUK all over its clothes and stores some time ago. It is likely, however, that the "fashion vs style" moniker is here to stay.

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