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French Connection losses narrow as it reveals aborted takeover interest

The revelation of an unsolicited takeover approach and narrowed losses last year at French Connection have helped to boost investor confidence in the fashion retailer.
Shares soared 20pc after the struggling chain revealed a ?2.3m pre-tax loss, which was its sixth in a row, but was down from ?5.3m the previous year.  
The retailer said it was approached last year about a potential takeover by a US company but that after discussions and due diligence checks the suitor decided against making a formal offer.
Stephen Marks, chairman and chief executive, said he believed the company was “very close” to returning to profitability after making “considerable progress... over the last year”. But he warned the UK market was “unlikely to improve in the near future”.
French Connection 1-year share price
The clothes seller closed 11 stores in the year to January, dragging down its retail sales 5.5pc to ?83m. But booming wholesale revenues, up 8.6pc, helped its group sales hold steady at around ?154m.
Mamequa Boafo, of Globaldata, said: "While the brand continues to make steps in the right direction through store rationalisation and online investment, regaining appeal and winning back lapsed customers will be a challenge given competition from the likes of Ted Baker and ASOS."
Mr Marks, who founded the business in 1972 and still owns two fifths of its shares, has been under pressure to turn it around after years of decline. 
Last year he hired My-Wardrobe.com founder Sarah Curren and former Moss Bros finance boss Robin Piggott as non-executive directors in a bid to improve its governance.
French Connection losses narrow as it reveals aborted takeover interest

French Connection's founder Stephen Marks has come under pressure to turn it around
Retailers have been contending with a drop in consumer spending along with higher costs because of the weak sterling and increases to the minimum wage.
Toys R Us and electronics seller Maplin fell into administration on the same day last month and the following week New Look was forced to close 60 stores as part of an insolvency deal with its lenders.
Last year it emerged that Sports Direct, the acquisitive sportswear giant led by controversial tycoon Mike Ashley, had built up a 27pc stake in French Connection, just shy of the 30pc threshold that would force it to make a bid for the entire business.
Shares in French Connection were up 24pc to 42p in morning trade.
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