Retail fashion group French Connection is in a more cautious mode in the second half of the year.

After the first six months of 2010 resulted in a profit for the British outfitter, slow sales in recent weeks at retail outlets have kept celebrations muted.

The impending VAT rises and winter budget constraints have hampered spending by consumers, many of whom are returning from summer holidays and tightening their purse strings. Despite this, French Connection said last week that year-on-year comparisons with wholesale orders were still ahead, with the group forecasting slow by steady progress for the full financial year.

Like many in the fashion industry, French Connection has been streamlining its services to achieve greater profitability, with the latest round of restructuring seeing the sell-off of the loss making Nicole Farhi brand. In addition, partnerships in Europe and Japan have been scaled back in favour of the US, with the group claiming it has signed a new North American licensing partner. The deal will see LF USA, owned by the Hong Kong consumer goods exporter Li & Fung Ltd earn up to $10 million in net royalties over the next five years.

The latest direction for French Connection follows recent years of struggle following the decline of the popular FCUK brand. In stark contrast to last year’s £5.4 million pound loss, the group has finally been able to report a profit, though tough times are still ahead.

Leading high street fashion retailer French Connection has expanded its digital market.

The popular fashion label has announced the activation of a new online service that allows customers to rate its products.

Utilising the social commerce platform Bazaarvoice, French Connection hopes that by encouraging consumers to go online and rate their offerings, customers will be able to share their shopping experiences with their peers to enable the public to make better-informed decisions, while the initiative will also have the added benefit of a likely reduction in the number of returns.

The retailer can also keep abreast of what its customers are saying and tailor their services accordingly, such as using descriptions from reviewers to shape their own presentation and description. The move is the first of several new marketing strategies from French Connection, which is also looking at the addition of an online video sharing service for customers to model items in addition to other digital engagement such as a soon to be released mini-series that will feature on You Tube.

The digital revolution is part of the present ‘The man and the woman’ advertising campaign that will use a series of short films to showcase the forthcoming autumn collection, where viewers can click on the featured items to purchase online. The move is all part of a greater push to bring in-store facilities to in-home, as many customers do not have the time or opportunity to spend hours trying on sizes and models in fitting rooms to make their decision.

French Connection said on Monday that they are selling its Nicole Farhi designer brand, as well as closing most of its operations in the United States – 17 out of 23 stores. The group’s chief operating officer Neil Williams said that they couldn’t see the US stores returning to profitability for a considerable amount of time.

The Nicole Farhi brand has lost a lot of money over the years and is being sold to OpenGate Capital, a private equity firm, for as much as £5 million. This ends the business relationship between Stephen Marks, the founder and executive chairman of French Connection, and Nicole Farhi, the mother of his daughter. She will remain the creative director at the brand under the new owners, while the 23 stores and concessions in the United Kingdom will either be closed or transferred.

Marks said that the last year has been very difficult, but he is confident that the changes they have made will create a solid base for business development and allow the company to return to profitability soon. French Connection recorded robust sales in the UK and Europe. The restructuring of its overseas operations, which comes after the closure of its businesses in Scandinavia and Japan, will see the profitability.

The retail and wholesale group suffered an £8.7 million pretax loss for the year ended January 31. This is compared to the £11.8 million loss for the year prior. French Connection has been struggling since 2004, when it former slogan, FCUK (French Connection United Kingdom) reached its popularity peak. Last year’s revenues flatlined at £214 million.