By Pushkala Aripaka and Indranil Sarkar
(Reuters) – Fashion retailer French Connection said on Tuesday that it was seeking new suitors as investment firms Spotlight Brands and Gordon Brothers had pulled out of preliminary talks to buy the struggling UK company.
French Connection said it had formally launched a sale process and had been approached by three other parties and was also still in preliminary talks with previously announced joint suitor Go Global Retail and HMJ International.
London-listed French Connection was a force in the British fashion market in the 1990s and was once known for its provocative “FCUK” brand of clothing and accessories, but the company has not been profitable in nearly a decade.
Just before the COVID-19 pandemic began last year, it had abandoned plans to sell itself after a more than year-long review of its business. However, as the crisis deepened, sales of already struggling British retailers, including French Connection, Laura Ashley, Oasis and Arcadia, were hard hit.
Last month French Connection had said its talks with Spotlight-Gordan and Go Global-HMJ were at a very early stage.
On Tuesday it said Spotlight and Gordon Brothers did not intend to make an offer.
Go Global-HMJ has until March 5 to decide whether to make a bid.
Shares of French Connection have also had a roller coaster ride. They nearly tripled in value since the start of this year to Monday’s closing price of 26.8 pence, erasing a 72% fall in 2020. At Monday’s closing price, French Connection is valued at roughly 26 million pounds ($36 million).
In October, the company reported that its losses more than tripled in the six months through July 31 from a year earlier, as the retailer, whose brands include namesake French Connection, Great Plains and YMC, also struggled to differentiate itself from rivals such as Inditex’s Zara.
WH Ireland is acting as the sole financial adviser and broker on the sale for French Connection, which was founded in 1972 by Chief Executive and top shareholder Stephen Marks.
($1 = 0.7181 pounds)
(Reporting by Pushkala Aripaka, Indranil Sarkar and Jasmine I S in Bengaluru; Editing by Krishna Chandra Eluri and Susan Fenton)