FRENCH CONNECTION BOSS TOLD: IT’S TIME TO STEP DOWN OR SELL UP

THe RoW at the top of ailing fashion brand French connection has deepened as investors demand a sweeping overhaul at the firm.

Gatemore capital, a londonbased investment fund which holds an 8pc stake, has issued an ultimatum to the brand’s chief executive, chairman and major shareholder stephen marks: step down from one of the top jobs or sell up.

it is thought the battle could end in sports Direct owner mike ashley increasing his grip on the company.

sports Direct already owns 11pc of French connection, and billionaire ashley could raise his stake if smaller shareholders decide to sell.

schroders offloaded its stake in February, which is how ashley built up his holding in the first place.

The dust-up comes after five years of losses at the brand, whose FcUK slogan once featured on the T-shirt of fashion-conscious young people.

But it has fallen out of fashion and last year losses widened from £3.5m to £5.3m while revenue fell 6.7pc to £153.2m. That has led a group of investors who control about 15pc of the company, including oTK Holdings and Gatemore, to demand change.

Their concerns deepened after French connection’s aGm last week, where more than half of independent shareholders who voted via proxy were against the reappointment of both marks and nonexecutive director Dean murray.

However both were re-elected by a show of hands. murray has been on the board for more than nine years, meaning he is no longer considered to be independent.

French connection has said it wants new independent retail experts on its board.

liad meidar, chief investment officer at Gatemore, said: ‘There are people out there who feel they have a God-given right to be on a board and are welcome to run the business as they see fit... something needs to be done about it. We are doing that something.’

meidar wants marks to sell French connection believing it should be broken up, making the business worth between £80m and £100m. a failure to do this could spark smaller shareholders to band together to demand action, he said.

marks, who founded French connection in 1972, has a 42pc stake. French connection want him to keep all his roles to avoid destabilising the business during its turnaround plan.

The company said: ‘We are well aware of the views of a small group of shareholders. We are delivering a turnaround plan which is designed to streamline the business and return it to profitability. management’s focus is on achieving this.’