French Connection shares soar as it reveals two takeover approaches | Business News

French Connection has revealed it has received two takeover approaches by investment specialists looking to snap up the struggling clothing retailer.

Shares in the fashion brand soared by a third in early trading after it informed investors of the initial buyout overtures, following market speculation.

The company, which is valued at a little more than £15m, said it received one approach from retail investor Spotlight Brands, with backing from restructuring and investment firm Gordon Brothers.

Stephen Marks founder and present chairman of French Connection  PRESS ASSOCIATION Photo. Picture date:Thursday 7th February  , 2008.See PA Story. Photo credit should read: Andrew Parsons/PA Wire
The retailer was founded by Stephen Marks in 1972

Spotlight has backed British brands including fitness-focused Sweaty Betty, while Gordon Brothers acquired the Laura Ashley brand last year after it went into administration.

French Connection said it has also received another potential proposal from brand investment platform Go Global Retail.

It said that discussions with both Spotlight and Go Global “remain at a very early stage”.

“Accordingly, there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made,” the retailer said in a statement.

The firm was founded by Stephen Marks in 1972 but has seen sales hit by the turmoil on the high street in recent years, with the coronavirus pandemic further adding to its difficulties.

In December, French Connection said it had seen “encouraging” sales after some stores were able to reopen, before the latest national lockdown came into force in January.

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The takeover approaches come more than a year after French Connection called off plans to find a buyer following a year-long search.

A sale could also secure a payout for Mike Ashley, whose Frasers Group retail business owns nearly a 25% holding in French Connection.

Sky News