French Connection founder and CEO Stephen Marks plans to sell his remaining cornerstone stake in the fashion label.
Sky News UK has reported Marks has engaged Numis Securities to approach prospective buyers for the 42 per cent stake in French Connection which he still holds. He founded the brand back in 1969.
UK media is reporting that should a buyer be found for the stake, it would almost certainly trigger a takeover bid for the entire company. A formal stock exchange announcement is pending.
French Connection is emerging from a challenging period in its history after its hugely successful FCUK era brand positioning fell from favour in the late 2000s. In recent months, it has built strong sales online via Asos and it raised £23.3 million from the sale of 75 per cent of its Toast label in April to Danish retailer Bestseller United, parent of Selected, Vera Moda and Jack & Jones, among others.
But the parent brand, now down to a store network of only about 30, recorded a like-for-like sales decline of 7 per cent in the half year to July 31 and a loss of £5.5 million. Marks, however, anticipates the business will be profitable by January with licensing income on the rise, reaching £2.6 million for the period, and wholesale revenues up 6.2 per cent.
Any deal for Marks’ stake will be heavily influenced by the second largest shareholder in French Connection, Mike Ashley, who holds 27 per cent of the stock. Ashley recently bought out troubled House of Fraser and is CEO of Sports Direct.