Stephen Marks moves a step closer to selling his struggling fashion company French Connection after receiving a £29m takeover offer
Stephen Marks has moved a step closer to selling his struggling fashion company French Connection after receiving a £29m takeover offer.
A group including the firm’s second-largest investor, little-known Newcastle businessman Apinder Singh Ghura, put forward a 30p per share bid, the company said after its share price spiked.
Its stock closed 16 per cent higher, up 3.7p, to 26.8p, valuing it at £26m.
Beached: At its peak in 2004 French Connection was worth around £500m but it later fell out of favour with younger shoppers
Marks founded French Connection, whose FCUK label was popular in the early 2000s, in 1972 and is the chairman and chief executive. He has been looking to sell his 42 per cent stake for years.
The 75-year-old would take home around £12m from the deal, which has not yet been formalised. At its peak in 2004 French Connection was worth around £500m but it later fell out of favour with younger shoppers as rivals such as Zara and Topshop gained steam, and has not been profitable for a decade.
The pandemic hit sales harder and losses widened to £12m in the year to January from a £3m loss the year before.
French Connection put itself up for sale in March after a flurry of takeover interest in February, with possible offers floated by Gordon Brothers International and Spotlight Brands, and another from Go Global Retail.
None ultimately decided to bid for the group but French Connection said it had been in talks with another three potential bidders.
The talks triggered a surge in French Connection’s share price, which prompted retail tycoon Mike Ashley to sell the 25 per cent stake he bought in 2017.
Ashley’s holding was picked up by Apinder Singh Ghura, who is part of the consortium that is bidding to take the company private.
Struggle: Stephen Marks founded French Connection in 1972
The group also includes Amarjit Singh Grewal and KJR Brothers.
Ghura, who spent years in the clothing industry before shifting into other investments such as property and care homes, said in February he was not planning a bid but was leaving his options open.
He said that he believed French Connection was ‘a good investment and a good brand’.
The fashion retailer also owns a clutch of other home and lifestyle brands, including Great Plains and the upmarket clothing chain Toast.
It previously owned Nicole Farhi, the eponymous brand set up by one of French Connection’s earliest designers, before it was sold off in 2010.
The fashion designer would take home around £600,000 from her 2 per cent stake in French Connection if the 30p-per-share deal went through.
Marks and Farhi were in a relationship and had a daughter, Candice Marks, before they separated. Farhi later married the acclaimed playwright and screenwriter David Hare.
Early in his career Marks was known as ‘The Hotpants King’ after he spotted the craze for in Paris and brought them to the United Kingdom.
His other ventures have included helping to finance the Guy Ritchie films Snatch and Lock, Stock and Two Smoking Barrels and owning a big stake in Hard Rock Cafe.