French Connection is set to change hands in a deal that values it at £29m.
MIP Holdings, run by existing French Connection shareholder Apinder Singh Ghura, together with Amarjit Singh Grewal and KJR Brothers Limited, has agreed a 30p a share deal which values the retailer’s issued share capital at about £28.98m. Ghura already owns 25.4% of French Connection shares, which will be bought by MIP as part of the deal.
Ghura, a director of MIP, says: “We are pleased to have reached an agreement with the French Connection directors on this recommended acquisition. We are looking forward to working with French Connection’s management to execute and implement MIP’s strategic plans to facilitate the future growth and profitability for the business.”
The deal is subject to shareholder backing and is being recommended by the French Connection board.
The deal comes more than two years after the multichannel retailer was originally put up for sale by owner Stephen Marks. No buyer was found at the time and it was taken off the market in January 2020, just before the Covid-19 pandemic, in order to focus on its multichannel turnaround. The intention was to focus on investing in its online platform and ensuring that it had the right number of shops to serve its customers from. Since then, Marks has described the pandemic as “the most difficult trading period that the group has ever faced.” The retailer posted a bottom line pre-tax loss of £19.7m in the year to January 31 2021.
In February this year, French Connection said two potential buyers were considering making an offer but these failed to materialise.
Stephen Marks, who is French Connection’s chairman and chief executive as well as its owner, now plans to retire from the company that he founded following the completion of the deal. He says: “Over the last five years, French Connection has made significant progress in its plans to rationalise the size of its store portfolio and to return the French Connection Group to profitability. It was always our intention to look at the most appropriate ownership structure for the business once it was back on track, and, having conducted a formal sale process, the French Connection board has concluded that the offer being made by MIP is fair and reasonable.”
He adds: “When the transaction closes, I will retire from French Connection. This is an appropriate time for me to step back from the business that I founded in 1972, and I would like to take this opportunity to thank all our people for their contribution to our achievements over the years. I wish them all every success in the future.”
French Connection is a Top250 retailer in RXUK Top500 research.
