Alarm bells were ringing in the retail sector last night after fashion chain French Connection announced a shock 17 per cent fall in sales during the past five weeks.

French Connection shares dropped after it admitted its recent ranges had not been in tune with the demands of shoppers and relied too heavily on successful styles of past seasons.

The like-for-like sales performance, which followed a 12 per cent fall over the year to December 31, lent weight to a British Retail Consortium (BRC) survey yesterday that found clothing sales had worsened last month.

Womenswear was particularly weak as freezing conditions kept shoppers at home during a month when overall retail sales fell 0.3 per cent on a like-for-like basis, the BRC said.

The news from French Connection also follows a warning from high street chain Boots that trading had remained subdued following the toughest Christmas in years.

Investors were showing renewed signs of a crisis of confidence yesterday, with shares in Next and Marks & Spencer also on the slide.

French Connection chairman Stephen Marks said recent trading had been very disappointing, but the positive response of shoppers to recent additions to its ranges offered hope that the company was starting to turn the corner.

Spending on advertising in the UK has also been increased to beef up the nationwide billboard and magazine campaigns taking place this month and next, which will continue to feature the "fcuk" logo criticised by some analysts.

Annual profits of £33m were in line with expectations after the group warned last year that it would not be able to match its haul of £38.7m in 2003.