Troubled British-based silk tie retailer Tie Rack plc yesterday ended months of speculation about its future by revealing an agreed £22.6 million sterling (€33.73 million) take-over offer from Italian textile firm Frangi SpA, one of its suppliers.
Tie Rack's shares, under a cloud after profit warnings, jumped on the news of Frangi's 43.5p per share offer. They gained 81/2p to 431/2 pence, up 24 per cent.
Tie Rack, with 426 shops in 30 countries, has fallen on hard times after rapid growth as a niche retailer in the 1980s and early 1990s. Its shares, which have under-performed for the past 18 months, have slumped from a peak of more than 200p in 1997 to a low of 18p at one stage this year.
The Asian economic crisis, plus the strong pound and tough UK trading conditions, hit Tie Rack's sales and margins. The group, which floated in 1981, made a first half loss of £4.3 million sterling and passed its interim dividend.
Frangi, based in Como in northern Italy, is likely to close some of Tie Rack's stores, including some in the UK, in a bid to revitalise the group. But Simone Frangi, the company's international director, said it was too early to say how many would close or whether jobs would go.
