Shares in the company slumped nearly 16% to 7.55 pence by 0707 GMT, deepening a 76% fall so far this year.
Britain's retail sector, already struggling with rising costs and stiff online competition, has seen a turbulent year due to the coronavirus crisis, with many companies slashing jobs and permanently closing stores.
"This has undoubtedly been the most difficult trading period that the Group has ever faced," Chairman and Chief Executive Stephen Marks said in a statement.
French Connection, which has not been profitable in nearly a decade, reported an underlying loss of 12.2 million pounds for the six months ended July 31, compared with a loss of 3.6 million pounds a year earlier.
The company, once known for its provocative FCUK brand of clothing and accessories, said virus restrictions hit revenue by 22.2 million pounds and profit by 9 million pounds during the period.
Just as stores started reopening and restrictions on movements eased, the UK government started tightening curbs again on some areas to stymie an acceleration in infections.
French Connection, which owns brands including Great Plains and YMC, said the recovery in sales since the stores reopened has reversed slightly due to the new restrictions.
The company, which pulled plans to sell itself earlier this year, had warned it could run out of cash earlier this year before securing a 15 million pound funding for two years to cover its cash needs.
(Reporting by Jasmine I S in Bengaluru; Editing by Rashmi Aich)