Shares in French Connection plunged more than 23 per cent after the fashion chain issued its second profit warning in six months, following “disappointing sales” in the UK and Europe.

The group singled out a tough trading environment in its domestic market, citing consumers reining in spending as a difficulty.

“It appears unlikely that our profit performance for the full year will meet current market expectations. The UK retail market remains particularly challenging and the combination of prevailing consumer caution and ongoing economic difficulties suggests that this will not improve in the second half of the year.

“We therefore remain cautious about the outlook for the rest of the financial year.”– Copyright The Financial Times Limited 2012