French Connection shareholders vote for takeover
French Connection is heading back into private ownership, ending a 38-year run as a public company. Shareholders in the struggling UK fashion brand have voted to back the £29 million takeover by Newcastle-based businessman Apinder Singh Ghura.
London-listed French Connection agreed to sell itself in September following years of losses that were only made worse by the pandemic.
Mip Holdings, a newly incorporated consortium owned and controlled by Ghura, Amarjit Singh Grewal and KJR Brothers Limited, headed by Rafiq Patel, is expected to take control of the business on 8 November. However, the takeover deal does require final court approval before the shares are expected to cease trading on 5 November.
Outgoing chair and chief executive Stephen Marks, who co-founded the chain in 1972 and owns nearly 42% of the company, is set to receive about £12 million for his stake in the business. But that’s a small figure compared to what it was worth just a few years ago.
Ghura told The Guardian newspaper said: “We look forward to working with French Connection’s management to execute and implement our strategic plans to facilitate the future growth and profitability for the business.
He added: “We must also pay tribute to Stephen Marks for his support during the acquisition process.”
Although the group has failed to make a pre-tax profit since 2012, in October the business did show a hint of recovery in its latest trading figures. The business saw increases in both wholesale and e-commerce sales, but this has yet to offset a 21.2% fall in half-year revenues compared to 2019, hit by a big reduction in its retail portfolio. However, the comparison to a year ago was a more flattering one with group revenue up 68.2% on that basis.
The company’s underlying loss also narrowed to £0.9 million from £3.6 million in 2019, driven by the continued closure of non-contributing stores, the bounce-back of wholesale volumes and a tight focus on overheads.
French Connection, which also owns the Great Plains and You Must Create (YMC) brands, operates 67 stores and concessions in the UK together with 161 locations overseas under franchises and licences.
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