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Shares in British fashion chain, French Connection Group Plc, rose around 18 per cent today after it said it was close to returning to profit and disclosed it had been approached by an unnamed US group about a potential takeover although talks did not lead to an offer.

“Our goal has been to return the group to profitability and I believe we are very close to achieving that aim, given the momentum that we are currently seeing within the business,” Chief Executive Stephen Marks said.

French Connection said negotiations about a potential offer for the group had gone on for a number of months last year before they broke off.

While Marks is the largest shareholder in the company with a stake of around 41 per cent, Mike Ashley’s Sports Direct International holds a 27 per cent stake.

Activist investor Gatemore Capital last March urged the loss-making company to split itself or spin off its Toast brand, among other options.

Gatemore sold its entire stake in July, saying it was not satisfied with the pace of change at the retailer.

French Connection reported a 0.8 percent increase in like-for-like sales at its stores and said the retail market in Britain remained”particularly challenging”.

French Connection has been struggling to fend off competition from fast-fashion rivals such as ASOS Plc (ASOS.L), Forever 21 and Inditex’s (ITX.MC) Zara. It has closed stores and hired new management and design teams as it tries to turn the corner.