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French Connection has revealed that a Newcastle-based businessman is leading a £29m pitch to buy the ailing fashion brand.
Shares in the fashion chain shot up nearly 16% on Thursday to 26.8p, giving it a market value of about £26m, after the company announced in a statement to the stock market that Apinder Singh Ghura had teamed up to make a bid for it with Manchester-based business partner Amarjit Singh Grewal and KJR Brothers Ltd.
Ghura, who spent years in the clothing industry before shifting into other investments including property and care homes, bought a 25% stake in French Connection from Mike Ashley’s Frasers Group, the owner of Sports Direct, in February.
“I like to invest in things I understand and clothing is something I have been doing for a long time. To me this is a good investment and a good brand,” Ghura said at the time.
French Connection was founded by its current chair and chief executive, Stephen Marks, in 1972. It owns the Great Plains and You Must Create (YMC) brands, operates 67 stores and concessions in the UK, and has a further 161 locations operated under franchise and licences. It employs about 780 staff.
Ghura’s consortium’s attempted bid for French Connection comes after the three members of the group together acquired the Bench fashion brand in March this year via a group called Wraith Holdings International, which has former Sports Direct executive Peter Wood as a director.
Wood also co-owns a group called Apparel Brands with Grewal, which owns distribution rights for other revival brands including Bench as well as 1980s casuals label Farah and Dunlop, the tennis shoe brand which was once owned by Sports Direct.
A spokesperson for the consortium said there was no connection between either Mike Ashley or Sports Direct and the current bid.
French Connection said in March it was conducting a formal sale process but no bid emerged from two potential suitors – Spotlight Brands, which had backing from the restructuring and investment firm Gordon Brothers, and Go Global Retail.
It previously spent over a year looking at “strategic options”, including a sale of the business before shutting down that sale process in January last year.
The latest talks come after years in the doldrums for French Connection, which was once highly sought after thanks to its controversial fcuk branding that launched in the 1990s and ran until the mid-00s. Since then the company, which continues to be run by the now 75-year-old Marks who owns nearly 42% of the company, has fallen out of favour.
In the year to January, sales dived 40% and the company made a pre-tax loss of nearly £12m. The group, which like many other brands suffered from high street pandemic lockdowns, has not made a pre-tax profit since 2012.
French Connection said talks with the latest bidding consortium over a potential 30p a share approach might not result in an offer for the company. It said it had alerted the stock market about the talks without the consent of the bidding group.
“Discussions with the consortium remain ongoing. Accordingly, there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made (although any offer is likely to be in cash),” it said.