French Connection founder in share sale

French Connection founder and chairman Stephen Marks today looked set to raise around £40m (€60m) from the sale of shares in the high street retailer.

The move by the 57-year-old, who is using the proceeds to meet personal requirements, will reduce his stake from 52% to around 42%.

French Connection also confirmed that trading remained in line with expectations, although it said business for its UK retail arm continued to be tough. Wholesale trade, which accounts for 47% of UK turnover, performed better.

Mr Marks, who set up the business in 1969, has instructed the company’s brokers to place between eight and nine million shares with institutions.

That will leave French Connection’s largest shareholder with up to 40.9 million shares, representing between 41.9% and 42.9% of the company.

Mr Marks has agreed not to sell any further shares for six months, except with the consent of brokers Deutsche Bank and the company’s directors.

Today’s developments left French Connection shares 6% lower.

The trading update is in line with comments in March, when the company warned that it faced tough comparatives against a strong performance last year. It added that sales at its 61 UK branches had been softer than hoped.

However, the company’s North America and licensing business both continue to show strong growth, the statement added today.

For the year to the end of January, stockbroker Seymour Pierce is forecasting pre-tax profits of £43.7m (€65.5m), against £38.7m (€58m) a year earlier.