Mike Ashley’s Sports Direct revealed as mystery owner behind 11pc French Connection stake – Telegraph.co.uk

Schroders, French Connection’s second biggest retailer, disclosed that it had sold its 9.27pc stake on Wednesday afternoon, but did not identify the buyer at the time.

In addition to the Schroders stake, Mr Ashley has mopped up almost a further 2pc, either in the open market or a position that he has held for a while. Stakes below 3pc do not have to be disclosed.

A French Connection spokesman said: “”We note that Sports Direct has taken long-term significant stakes in a number of British retailers in recent years, and see this investment as a vote of confidence in the true potential of our company. We look forward to working with them more in the future”

Mr Ashley’s interest comes at a key moment for French Connection, which is under pressure from a trio of activist investors lobbying for change. 

The Telegraph reported last month that the retailer has begun hunting for replacements for two of its non-executive directors following intense pressure from activist investors at Gatemore, which owns an 8pc stake in the business. 

Gatemore has joined forces with investors OTK Holding and Zoar Invest,  to push for changes at the company. The trio own 15pc between them.

Liad Meidar, managing partner at Gatemore, said: “We are encouraged by the fact that Sports Direct has taken a stake. As a starting point,  that a retail heavyweight sees the value in the French Connection brand is an endorsement.

“The value of the company is in the brand and to get outside validation is very helpful. We look forward to talking to Sports Direct,” he continued.

It is thought likely Mr Ashley has taken the position in connection with Sports Direct’s upmarket fashion business Flannels, which has been increasingly important to the business. Last year the company paid £108m for an Oxford Street property that will become a Flannels flagship.

French Connection is controlled by founder and chief executive Stephen Marks, 70, who is the largest shareholder in the business, owning 42pc. 

Mr Ashley is the second retail veteran to take a stake in French Connection as Dunelm founder Will Adderley also owns a 8pc stake through his private investment vehicle.