The loss, for the year to 31 January, compares with a profit of £3.1m for the previous 12 months. Chairman Stephen Marks said that while the figures were "disappointing", they were a result of the global downturn.
UK same-store sales rose by 2% over the year. However, in the US like-for-like sales fell by 3%.
French Connection said it had been forced to cut prices in the US to clear stock and that it had written down the value of its US business by £10.8m.
"The well-reported decline in the US retail market has had a profound effect on our US business," the retailer said.