Who is looking to connect with French Connection?
Embattled fashion brand French Connection (FCCN) has confirmed media speculation (8 Oct) it is considering strategic options including putting itself up for sale.
As we write the news has sent the shares surging higher to 54p, within sight of 52-week highs.
Founder, chairman and CEO Stephen Marks has reportedly approached bidders to offload his near-42% stake and French Connection is in an offer period; any deal to buy Marks’ holding would likely trigger a mandatory offer for the entire enterprise.
Fighting to arrest like-for-like sales declines and battle its way back to profitability amid cut-throat competition, French Connection has long been viewed as a value trap for investors.
A sale of the business could be the required catalyst to unlock this value.
A buyer would have to extricate the retailer from leases and further streamline the brick and mortar estate but there look to be opportunities to expand the wholesale and licencing parts of the business.
Mike Ashley’s Sports Direct International (SPD) has a 27% stake in French Connection, although it is unclear if Ashley is one of the interested parties.
Last year, French Connection received an unsolicited bid from an unnamed US group, but the suitor ultimately walked away from a deal. (JC)