Shares in French Connection surge on prospect of sale
Bengaluru
FRENCH Connection shares rose as much 45 per cent on Monday after the British fashion retailer said the company could be sold as it reviews its strategic options.
The statement follows a weekend report from Sky News that chief executive officer and chairman Stephen Marks, who founded the company in 1969 and remains the largest shareholder, had approached bidders to offload his stake.
Mr Marks retains a 41.6 per cent stake, according to Refinitiv Eikon data while Mike Ashley's Sports Direct International holds 27 per cent. French Connection shares were up 34 per cent at 57.5 pence at 0800 GMT, giving the company a valuation of around £55 million (S$99.34 million).
The company, whose brands include its namesake French Connection, Great Plains and YMC, said that there is no certainty an offer will be made for the company.
French Connection has closed stores and hired new management and design teams as it battles fast-fashion rivals such as ASOS, Forever 21 and Inditex's Zara.
Once best known for its FCUK brand of clothes and accessories, the company had said in March that it was close to turning profitable and later added that it would consider restarting dividend payments.
In its most recent financial results, the company's cost-cutting measures helped reduce losses marginally in the first-half of the year.
However, revenue was down over 10 per cent with comparable sales in Europe and Britain falling 7 per cent. French Connection expects to close eight more stores this year as UK high street sales disappoint.
The company reported an underlying pretax operating loss of £5.5 million for the six months ended July 31
In April, the company agreed to sell its 75 per cent stake in clothing brand Toast, known for its Venetian palazzo and pyjamas for women, to Dutch firm Bestseller United A/S for £23.3 million. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Consumer & Healthcare
HCA beats first-quarter profit estimates on higher patient admissions
US FDA approves Pfizer’s gene therapy for rare bleeding disorder
EU toughens rules on Chinese fashion retailer Shein
Best World under fire from shareholders at AGM over dividends, director salaries
‘Extreme’ climate blamed for world’s worst wine harvest in 62 years
Sheng Siong Q1 net profit up 9.3% on higher revenue