French Connection shares rocket amid takeover bids

Shares in French Connection closed up 67% at 26p on Friday after the struggling fashion chain said it had received two takeover approaches.

The retailer, which has posted losses for most years in the past decade, said the talks were at an early stage.

One offer comes from Spotlight Brands, which owns Sweaty Betty, together with Gordon Brothers International, which recently bought Laura Ashley.

The other bid is from Go Global Retail and HMJ International Services.

On Thursday, shares in French Connection began trading at 11p, but rose 40% throughout the day on speculation it could be a bid target.

Responding to the speculation, the retailer confirmed it had received bid approaches, but there was "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)".

Sales hit

The business was founded more than 50 years ago by chief executive Stephen Marks, who began the business on the back of a consignment of cheesecloth shirts.

It currently has about 78 stores in the UK.

In October, it said that sales for the first half of 2020 had fallen by more than half to £23.9m as the Covid-related lockdowns closed its shops and cut consumer spending on clothes.

The company employs about 1,000 staff, according to its latest annual report. Chief executive Stephen Marks, who founded the company, owns more than 40% of the firm, while billionaire Mike Ashley's Frasers Group owns just under a quarter of the company.

In 2018,French Connection had said it could be sold when it said it was "reviewing all strategic options" including the potential sale of the firm.