High street retailer French Connection seeking new suitors after investment firms pull out of talks
High street retailer French Connection is racing to find a new buyer after investment firms Spotlight Brands and Gordon Brothers pulled out of early-stage talks to buy the struggling chain.
The fashion firm has formally launched a sales process and said it has been approached by three other suitors. It is also still in preliminary talks with previously announced parties Go Global Retail and HMJ International.
French Connection – which has not been profitable for nearly a decade – last year abandoned its plans to sell itself just before the Covid-19 pandemic began.
The decision followed a year-long review of its business. However, the pandemic hit sales at the already struggling retailer, prompting it to hoist the for sale sign again.
Last month French Connection said its talks with Go Global-HMJ and Spotlight-Gordon were at a very early stage. Today it confirmed that Spotlight and Gordon Brothers did not intend to make an offer.
Go Global-HMJ has until March 5 to decide whether to make a bid.
Shares of French Connection have also had a roller coaster ride. They nearly tripled in value since the start of this year to Monday’s closing price of 26.8 pence, erasing a 72 per cent fall in 2020. At Monday’s closing price, French Connection is valued at roughly £26m.
In October, the company reported that its losses more than tripled in the six months through 31 July from a year earlier, as the retailer, whose brands include namesake French Connection, Great Plains and YMC, also struggled to differentiate itself from rivals such as Inditex’s Zara.
WH Ireland is acting as the sole financial adviser and broker on the sale for French Connection, which was founded in 1972 by chief executive and top shareholder Stephen Marks.