French Connection under pressure from investors
In a statement, Gatemore Capital Management said the move follows over a year of campaigning to improve French Connection’s share price through a series of corrective measures.
The signatories to the letter, which also include OTK Holding A/S and Zoar Invest Aps, hold approximately 15% of the ordinary shares of French Connection Group. They argue that French Connection could potentially reach a negative cash balance by the summer of 2017, forcing it to sell the lease on its flagship store on London’s Oxford Street.
In particular, the letter demands that the board replace two of its non-executive directors and split the chairman and chief executive roles which are both held by founder, Stephen Marks.
Alternatively, the letter’s signatories said they would welcome a decision to engage an investment bank to run a sale process for the group.
Liad Meidar, managing partner & chief investment officer at Gatemore, said: “It is distressing to watch a once-celebrated British High Street brand like French Connection flounder so badly. After nearly a decade of inaction and poor decision-making, it is time for the French Connection board to change its membership and reform its structure to bring it in line with the latest corporate guidelines.
“We believe that these changes, introduced promptly and transparently, could avert French Connection’s downward fiscal spiral and turn this into a story about the resilience and adaptability of a renowned British brand.”
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