French Connection is dumping its final dividend after plunging to a loss and admitting there's little hope of a turnaround for the business any time soon.

The fashion house has been trying to reinvent itself for at least the past two years, with critics saying its styles, previously regarded as edgy, now look out of date.

The company made a loss of £17.4 million in the year to the end of January, despite a £12 million rise in turnover to £248 million. It will not be adding to the interim divi of 1.7p a share as it attempts to preserve cash.

The main reason for the slump into a loss is a £10 million write-down at the US business, which seems to be worth notably less than when it was bought.

Stephen Marks, the chairman and 42% shareholder, called the results "disappointing" but sought to blame "the impact on fashion markets of the downturn in the major world economies".

The shares are down 30% in the past 12 months, even worse than rivals'.

Today they fell another 3¼p to 53p, leaving Marks' stake worth £21 million.

He added: "We will continue to focus on creating great product but we are preparing for another difficult year."

French Connection has already moved to axe jobs from head office. More cuts seem likely as it continues to reduce costs.

Sales in the UK actually rose 2% over the year, with ladieswear in particular doing well.

Marks admitted some time ago that the Fcuk branding was overdone and needed to be replaced by something less garish.

He said today: "The menswear ranges for 2009 have been entirely revamped and while it will take some time to entice customers back to the stores, particularly in this contracting market, we are confident that the changes will reap rewards in the longer term."