French Connection sells Farhi brand

The designer label – set up by Farhi and French Connection chairman Stephen Marks in 1982 – will be sold to private equity firm OpenGate Capital for up to 5m.

A strategic review will also see loss-making stores in the US shut alongside the closure of its Japanese business and some European retail outlets.

The moves came as the group posted losses of 24.9m for the year to January 31, up from 16.4m the previous year.

Mr Marks said the group had "had to make some tough decisions" during the past year.

"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 and the considerable talents of the team so that its full potential is realised," he said.

The Nicole Farhi business racked up operating losses of 5.6m on revenues of 21.7m last year and has been loss-making for several years.

The shake-up leaves French Connection with its UK and European retail and wholesale operations, the Great Plains wholesale-only ladieswear range and Toast, its mail order fashion and homewares brand.

The UK and European retail business achieved like-for-like sales growth of 2.8 per cent, although this was driven by its ladieswear ranges where sales were up 4.8 per cent.