French Connection sells Nicole Farhi

The group, which has previously exited businesses in Japan and Northern Europe, said on Monday its after tax losses widened to 24.9 million pounds in the year to January 31, from a loss of 16.4 million in the previous year.

But businesses being kept made an operating profit of 1.3 million pounds on a 1 percent rise in revenue to 200.3 million.

French Connection shares were up 14.3 percent at 47.65 pence at 10:06 a.m. British time, valuing the business at about 46 million pounds.

Prior to Monday's update the stock had slumped 23 percent over the last 6 months, underperforming the general retail index <.FTASX5370> by about 50 percent. Shares were changing hands for over 200 pence two years ago.

French Connection has suffered in recent years as it struggled to reposition itself after the popularity of its FCUK brand waned even before the recession started.

"The implications of the restructuring is that the business, which will largely consist of underlying UK retail and wholesale business, should be profitable in 2010/11," said Seymour Pierce analyst Freddie George.

With French Connection restructured speculation regarding the possibility of founder, chairman, chief executive and 42 percent shareholder Stephen Marks taking the firm private could resurface.

"We are a Plc at the moment, there's no indication that we're not going to be a Plc... But there's no certainty in anything," chief operating officer Neil Williams told reporters.

French Connection said it was selling Nicole Farhi to U.S. private equity firm OpenGate Capital for up to 5 million pounds.