French Connection Group, the fashion retailer and wholesaler, yesterday posted bigger first half losses, citing a "significant downturn" in its major markets.

For the six months to July 31 the group, which trades in the US and Asia as well as the UK, made a pre-tax loss of £3.5 million versus a loss of £2.5 million in the same period last year. Turnover rose three per cent to £112.4 million.

The pre-tax loss would have been worse but for a £1.9 million gain on the disposal of leased property.

Stephen Marks, the group's founder, chairman and 42 per cent shareholder, said the results were "disappointing".

"It would appear that the economic environment is unlikely to improve in the short-term and that therefore any gains we make will have to be achieved through significant out-performance by our ranges," he said, adding that the business is looking to cut costs where possible.

Mr Marks took some encouragement from recent retail trading in the UK and Europe which has shown growth over last year. But he said North America had been softer.

Meanwhile fashion retailer Next posted a 12 per cent fall in first-half pre-tax profit said its internal forecast for the full year remained in line with the market consensus.

UK second-largest clothing retailer by sales made an underlying pre-tax profit of £173.5 million for the 26 weeks to July 26, down from £198.2 million in the same period last year. Analysts' estimates had ranged from £165 million to £177 million.

Next said the majority of external forecasts for full-year pre-tax profit were currently in the range £400 million to £440 million.

The profit decline reflected a fall in sales, partly offset by gross margin gains. Like-for-like full-price sales from 353 Next Retail stores were down six per cent, while sales in the Next Directory home shopping operation increased 2.2 per cent.