Fashion group French Connection is selling its Nicole Farhi business and closing most of its US shops following a strategic review.
The changes, which follow the earlier decision to quit the Japanese market, will create “a more focused business which is expected to be profitable and cash-generative”, the retailer said.
French Connection is disposing of loss-making Nicole Farhi for about £5m to private equity firm OpenGate Capital. The sale ends an almost 30-year association between the retailer and the Nicole Farhi brand, founded by French Connection chairman Stephen Marks and his one-time partner Nicole Farhi in 1982.
French Connection is to cut its number of US shops from 23 at present to six. The closure programme will cost about £6.5m. French Connection will continue to wholesale into the US.
French Connection chairman and chief executive Stephen Marks said: “The strategic review is now complete. We have had to make some tough decisions but our exit from the Japanese market, the reduction of our US presence and the sale of Nicole Farhi, together with a reduction in our overhead base, leaves us with a continuing business that we expect both will be profitable and cash generative even in the current difficult economic environment.
“It is sad to see the Nicole Farhi brand leaving the group, but I am delighted that its new owners are totally committed to nurturing the brand so that its full potential is realised.”
French Connection also issued its full-year results. Operating profit from businesses to be retained was £1.3m compared to a loss of £0.7m the previous year. Sales rose 1% to £200.3m.
The reported loss after tax was £24.9m compared to £16.4m the previous year.