Stephen Marks moves closer to selling his struggling fashion company French Connection after £29million takeover bid
Stephen Marks has come one step closer to selling his struggling fashion company French Connection after receiving a £29 million takeover offer.
A group, including the company’s second-largest investor, little-known Newcastle businessman Apinder Singh Ghura, has made an offer of 30 pence per share, the company said after its share price rose.
The stock closed 16 per cent higher, up from 3.7p to 26.8p, and valued at £26m.
Stranded: At its peak in 2004, French Connection was worth around £500 million, but later fell out of favor with younger buyers
Marks founded French Connection, whose FCUK label was popular in the early 2000s, in 1972 and is its chairman and chief executive. He has been wanting to sell his 42 percent share for years.
The 75-year-old is said to take home around £12million from the deal, which has not yet been formalised. At its peak in 2004, French Connection was worth around £500 million, but it later fell out of favor with younger buyers as rivals such as Zara and Topshop gained steam and had been unprofitable for a decade.
The pandemic hit sales harder, with losses rising to £12 million in the year to January, from a £3 million loss the year before.
French Connection put itself up for sale in March after a wave of acquisitions in February, with potential offers from Gordon Brothers International and Spotlight Brands, and another from Go Global Retail.
No one ultimately decided to bid on the group, but French Connection said it was in talks with three more potential bidders.
The talks led to a surge in French Connection’s share price, prompting retail mogul Mike Ashley to sell the 25 percent stake he bought in 2017.
Ashley’s business was picked up by Apinder Singh Ghura, who is part of the consortium bidding to sell the business.
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 moving into other investments, such as real estate and care homes, said in February that he had no intention of making an offer, but left his options open.
He said he believed French Connection was “a good investment and a good brand.”
The fashion retailer also owns a number of other home and lifestyle brands, including Great Plains and the upscale clothing chain Toast.
It previously owned Nicole Farhi, the eponymous brand founded by one of French Connection’s early designers, before being sold in 2010.
The fashion designer would take home around £600,000 from her 2 percent 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 splitting up. Farhi later married acclaimed playwright and screenwriter David Hare.
Early in his career, Marks was known as ‘The Hotpants King’ after spotting the Paris craze and bringing it to the UK.
His other ventures included financing the Guy Ritchie films Snatch and Lock, Stock and Two Smoking Barrels and owning a large stake in Hard Rock Cafe.