It has emerged that French Connection turned down a bid from ex-AllSaints and USC chief executive Stephen Craig in partnership with two private equity firms in January.
The bid, placed on 19 December, was to acquire the shares in French Connection at 41.4p per share – a premium of 18% on the share bid price at the time.
However, at a board meeting in January a decision was made not to recommend the offer to the shareholders.
A source close to French Connection said: “It was a proposal that came with so many conditions that the board felt it very little chance of resulting in an officer.”
The announcement of the rejection has to date been restricted under a non-disclosure agreement.
Barry Knight, managing partner of Retail Restructuring, which was the principal in the offer said “Stephen, myself and our other partners were both disappointed and particularly surprised at the decision. We believe the offer was at the correct level and in the best interests of all the stakeholders and employees of French Connection.
”We had spent over 12 months producing and modelling a detailed turnaround plan. The process involved having numerous meetings with senior management. The plan, which ran to more than 100 pages, both addressed the current issues facing the company and identified new revenue opportunities.
“Moving forward, we would like to wish French Connection and its staff all the best in what is the most challenging time the retail sector has ever known.
French Connection announced in January that the business was no longer in a formal sale process and would refocus on its turnaround to include the “right-sizing” of its store portfolio.
The turnaround will also include increased investment into the retailer’s online platform, a focus on growing its wholesale business, particularly in the US, and increasing its licensed categories.
The retailer swung to an underlying loss of £2.9m for the year to 31 January, compared with a profit of £800,000 in 2018/19, as a result of planned store closures and a “difficult retail trading environment”.
In April, French Connection appointed wealth management and brokerage firm WH Ireland as its financial adviser and sole broker.
French Connection has been contacted for comment.