French Con­nec­tion founder ‘look­ing to sell stake’ af­ter 49 years

The Sunday Telegraph - Money & Business - - Business - By He­len Chan­dler-wilde

STEPHEN MARKS, the French Con­nec­tion founder, is re­port­edly look­ing for buy­ers for his con­trol­ling stake in the com­pany, af­ter run­ning the brand for 49 years.

Mr Marks ap­proached po­ten­tial buy­ers for his 42pc stake in the last week, ac­cord­ing to Sky News.

The po­ten­tial sale is ap­par­ently at a pre­lim­i­nary stage. In­vest­ment bank Nu­mis Se­cu­ri­ties is re­port­edly ad­vis­ing Mr Marks, and look­ing into pur­chase op­tions in­clud­ing pri­vate eq­uity firms and other fash­ion re­tail­ers.

Mr Marks has led the busi­ness through boom years and dif­fi­cult times re­cently.

In the first half of this year the com­pany made a £15m loss, but said last month it was aim­ing to re­turn to prof­itabil­ity in its 2019 re­sults. The firm had a mar­ket cap­i­tal­i­sa­tion of £41.3m at Fri­day’s clos­ing price, much be­low its heights in the early Noughties, but 65pc above trad­ing lows in March of this year.

Ear­lier this year, French Con­nec­tion sold its 75pc stake in home­ware and wom­enswear brand Toast to Dan­ish fash­ion house Best­seller for £23.3m. The brand re­ceived £13.9m net cash from the sale. This is not the first time this year that there have been ru­mours of a takeover of French Con­nec­tion.

In March, the com­pany said it had re­ceived an un­so­licited takeover ap­proach from an un­named US party in 2017.

It said that af­ter “full due dili­gence and ne­go­ti­a­tion over a num­ber of months” the talks “ul­ti­mately did not lead to an of­fer for the group”. Al­most 80pc of French Con­nec­tion is owned by just three in­vestors. Mike Ash­ley, the con­tro­ver­sial bil­lion­aire boss of Sports Di­rect, owns about 27pc of French Con­nec­tion.

It is not known if he is in­ter­ested in this pur­chase.

Sports Di­rect has been con­nected to sev­eral high-street takeovers this year, in­clud­ing House of Fraser, which it bought in Au­gust. French Con­nec­tion has con­ces­sions in the depart­ment store.

Mr Ash­ley is re­port­edly also in the run­ning to buy Amer­i­can Golf and Evans Cy­cles.

Wil­liam Ad­der­ley, the founder of FTSE 250-listed home fur­nish­ings com­pany Dunelm Group, owns a smaller stake.

A French Con­nec­tion spokesman re­fused to com­ment.

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