French Connection is to sell Toast to Danish retailer Bestseller

French Connection is to sell Toast to Danish retailer Bestseller

French Connection is to sell its premium lifestyle brand Toast to Danish apparel company Bestseller, in a move expected to generate about GBP13.9m (US$19.6m) for the British fashion retailer and help it return to profitability.

In an announcement today (9 April), French Connection said the deal, which is conditional upon French Connection shareholder approval, will raise gross proceeds of GBP23.3m. French Connection owns 75% of the company, while Toast co-founders Jamie and Jessica Seaton hold 25%.

Headquartered in London, Toast is a premium lifestyle brand that sells womenswear, accessories, nightwear, loungewear and homeware. It generated revenues of GBP19m in the year ended 31 January 2018, up from GBP16.7m the year before. CEO Suzie de Rohan Willner is to stay on at Toast following the sale. 

French Connection said the move will allow it to focus further on its namesake brand in its core retail, wholesale and licensing businesses, while the net cash proceeds will be used for general corporate and working capital purposes and to support its continued turnaround and return to profitability.

"This is great news for Toast and its highly talented team. Toast is a very strong brand and I have no doubt that the team will continue to develop it further under Bestsellers's ownership and Suzie's continued leadership," says French Connection CEO Stephen Marks. 

Completion is expected to occur by the end of this month. Shares were up by more than 20% on the news today (9 April). 

Last month French Connection said it narrowed its full-year net loss to GBP2.3m (US$3.2m) and revealed it received an unsolicited takeover approach from a third party in the US last year.

French Connection close to turnaround, narrows FY loss