AUS
NZ
UK
CA
USA
IND
.jpg)
Highlights
- French Connection will be acquired for the first time since 1983.
- The £29-million takeover of the fashion brand led by a Newcastle-based businessman is backed by the shareholders of French Connection.
- A final court approval is needed for the takeover deal to take place prior to 5 November, when the shares are expected to suspend trading.
UK-based global retailer and wholesaler of fashion clothing, accessories and homeware French Connection Group plc (LON: FCCN) is about to fall into private hands for the first time since 1983. The fashion chain was founded in 1972 in London, and its co-founder Stephen Marks, who is the company’s 75-year-old chairman and chief executive, owns around 42% of the chain. He is about to get around £12 million for his stake in the company.
The £29-million takeover of the fashion brand led by a Newcastle-based businessman is backed by the shareholders of French Connection. It is expected that the takeover by the new owners will take place on 8 November 2021.
Around 67 stores and concessions in the UK are operated by French Connection. The Great Plains and You Must Create (YMC) brands are also owned by the brand. With a workforce of 780 people, it covers a substantial area of operation, covering 161 locations overseas under franchises and licences.
French Connection has been facing problems for years, like the highly controversial FCUK branding that was initiated in the 1990s and went on until the mid-2000s. The consortium has been putting in efforts for the revival of the brand. Since 2012, the group has not been able to record a pre-tax profit. It has also recently suffered amid the lockdown restrictions due to the coronavirus pandemic.
RELATED READ: Sainsbury (SBRY) & French Connection (FCCN): 2 retail stocks to buy now
Mike Ashley’s Frasers Group, the owner of Sports Direct, sold 25% stake in French Connection to Apinder Singh Ghura in February, who teamed up with Amarjit Singh Grewal, a Manchester-based business partner, and KJR Brothers, which is led by a textile businessman Rafiq Patel, to buy out the brand. Prior to moving towards other investment options, such as care homes and property, clothing industry was the sole focus of Ghura for years.
Through a group called Wraith Holdings International, the Bench fashion brand was acquired by the three in March prior to the French Connection deal being finalised now. One of the directors of Wraith Holdings International is Peter Wood, the former Sports Direct executive. Wood and Grewal also own a group called Apparel Brands together. Distribution rights for revival brands are held by this group, which comprise of Bench as well as the 1980s casuals label Farah, and the tennis shoe brand Dunlop, that was previously under the ownership of Sports Direct. A final court approval is needed for the takeover deal to take place prior to 5 November, when the shares are expected to suspend trading.
Ghura had stated that the strong shareholder support in the vote for the recommended acquisition was very pleasing. He added that the group was looking forward to work with the management of French Connection and enable the business to follow the path of profitability while ensuring its future growth through the implementation of its strategic plans.
RELATED READ: i3 Energy’s (LON:I3E) Wapiti acquisition delivers better than expected production
French Connection Group PLC’s share price performance
With a premium listing on the LSE’s main market, the shares of French Connection Group PLC were trading at GBX 28.80 as of 1 November 2021.
Its current market cap stands at £27.82 million, and it has given a return of 280.21% in 1 year. Its year-to-date returns stand at 195.43% as of 2 November.
