French Connection launches formal sales process as suitors back out

French Connection has launched a formal sales process after two investment firms pulled out of takeover talks.

Last month, the British fashion retailer said it had received two separate approaches: one from Spotlight Brands in conjunction with Gordon Brothers International, and another from Go Global Retail in conjunction with HMJ International.

French Connection noted at the time that the talks remained at a “very early stage” and so “there can be 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).”

On Wednesday, French Connection said Spotlight Brands and Gordon Brothers International have stepped back from the deal.

French Connection puts itself up for sale

But the company said it has been approached by a further three interested parties.

French Connection shares fell three percent to 26p following the news on Tuesday.

The high street retailer, which was highly popular in the 90s, has struggled in recent years to compete with online competitors.

The company last year abandoned plans to sell itself just before the pandemic.

For the six months to 31 July, French Connection reported a 53.1 percent dive in group revenue to 23.9 million pounds.

Retail revenue declined by 57.6 percent to 10.1 million pounds with both UK/Europe and North America sales significantly impacted by Covid-19 store lockdowns.

Image: French Connection, Facebook