Monday 25 June 2018

French Connection secures £23.3m sale of fashion retailer Toast

Women’s fashion and homeware retailer Toast has 12 stores and a wholesale deal to sell products through department store chain John Lewis.

A shop sign for French Connection in central London (PA)
A shop sign for French Connection in central London (PA)

By Ben Woods, Press Association Chief City Correspondent

Shares in French Connection have soared after the fashion chain struck a £23.3 million deal to sell lifestyle brand Toast to Denmark’s Bestseller.

The deal, slated for completion in April this year, consists of £21.3 million in cash and dividend of £2 million. French Connection investors sent shares 20% higher in morning trading on the London Stock Exchange.

Women’s fashion and homeware retailer Toast has 12 stores and a wholesale deal to sell products through department store chain John Lewis.

The price achieved for Toast reflects the strength of the brand and the business we have built behind it Stephen Marks, French Connection chief executive

It is joint owned by French Connection and its founders – Jamie and Jessica Seaton – which hold 75% and 25% respectively.

French Connection, which is eyeing a return to profit after axing loss-making stores, is expected to net around £13.9 million from the sale.

Stephen Marks, chairman and chief executive of French Connection, said: “The price achieved for Toast reflects the strength of the brand and the business we have built behind it.

“French Connection will use the transaction proceeds to underpin its core business, allowing us to focus on our priority of returning to sustainable profitability and growth.”

The deal will marry Toast with Bestseller’s collection of 20 fashion brands, including Jack & Jones and Vila Clothes, if it wins the backing of French Connection shareholders.

Toast was founded by Mrs Seaton in Swansea in 2007. It chalked up a 14% rise in revenues to £19 million for the year to January 31, 2018, and booked a 36% rise in pre-tax profits to £1.5 million.

The announcement comes after French Connection revealed last month that it had received an unwanted takeover approach from a US suitor in the middle of 2017.

The takeover tilt was made public as French Connection reported fees in connection with the approach in full year results showing sharply narrowed losses.

The fashion chain saw annual pre-tax losses nearly halve to £2.3 million from £5.3 million the previous year as it shut poorly-performing shops and overhauled ranges.

Press Association

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