British fashion chain French Connection might have found a buyer.
Rutland Partners, a private-equity firm known as a turnaround specialist, is reportedly interested in buying the retailer, which posted an 8 percent decrease in revenue in the year ended Jan. 31 of 164.2 million pounds (about $215 million), citing a reduced retail store portfolio and poor like-for-like sales as the main reasons for the decline.
The Sunday Times said Rutland is considering a 40 million pound ($52 million) bid for the business and a source told the newspaper that anything more would be difficult to justify, based on the fact that French Connection’s sales have fallen by one-fifth over five years.
In addition, any deal to go through would require a nod from founder and chief executive Stephen Marks, who has a 42 percent stake in the company and is fiercely protective of it.
“Overall the performance for the year has been disappointing due to the very poor first half but the improvement we have seen during the second half and into the new financial year shows that we are definitely moving in the right direction,” Marks said earlier this year, following French Connection’s disappointing financial results.
Earlier this summer, Marks snubbed suggestions made by activist shareholder Gatemore Capital Management, urging him to give up his joint role, lose the FCUK logo, focus on younger fashion and speed up store closings.
Today, French Connection is worth roughly 49 pence per share (about 64 cents). A decade ago it was worth 2.40 pounds per share (roughly $3 at current exchange rates).