British retailer, Frasers Group, has reportedly sold its 25 per cent stake in French Connection, a leading homeware, fashion clothing, and accessories retailer, to Apinder Singh Ghura, a property investor from Newcastle. The move reportedly comes after prices of the fashion retailer surged on hopes of an acquisition deal. The company offloaded its 24.1 million shares for nearly £3.8 million on 4th February, when shares of French Connection escalated by over a third at one point.
According to Peel Hunt analyst, John Stevenson, the French Connection represents another instance of Frasers’ stock market investment which had failed to perform brilliantly, with the share price of the fashion group lower than it was five years ago, when its owner, Mike Ashley, built up the stake.
The analyst believes that Ashley would have liked to have sold at a higher price, however it is not a game-changer. Stevenson further highlighted that French Connection was a great fit for Frasers’ brands, but it could not be seen being relinquished, so there was no other alternative.
As per reliable sources, unusual movement of stocks had forced Frasers to announce that it had received offers from two interested parties on 5th of February. Shares in the enterprise then escalated by a further 90 per cent the same day, so the company missed out on nearly £3.4 million in additional gains.
While it is understood that Ghura is not connected to either party announced as interested in the purchase, he has stated that he does not intend to launch a bid but is leaving his options open. The investor has spent several years in the clothing industry prior to shifting into other investments involving care homes and property.
As per a statement by French Connection, it had received offers from Spotlight Brands, with support from the investment and restructuring firm, Gordon Brothers. While Spotlight has supported British brands comprising the fitness-focused Sweaty Betty, Gordon Brothers took over the Laura Ashley brand in 2020 following its administration.