French may claim back Kookai estate from Forminster

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The Independent Online

The French parent company of the fashion chain Kookai is poised to take control of the UK estate if it fails to strike a new franchise deal with its UK franchise partner.

Forminster, the Alternative Investment Market-listed operator of Kookai in the UK, was forced to suspend its shares last week after talks with Groupe Vivarte of France broke down.

Forminster has warned investors its trading position from 1 January was "highly uncertain". Michael Rahamim, Forminster's managing director, did not return calls yesterday and has refused to provide any clarity on the company's future.

Vivarte, which is owned by the European private-equity group PAI, prefers to use franchisees to run its brands outside France. But it is considering making an exception for the UK after more than three months of "inconclusive" discussions with Forminster.

The UK company's right to the Kookai franchise runs out tomorrow. Although the chain brought forward its January sale, an assistant at its branch in London's Oxford Street said yesterday the stores were open as normal. "We have just got our normal sale on at the moment," she said. Its latest set of accounts shows there were 54 Kookai outlets in the UK in February.

Shares in Forminster have tumbled from 20p in September to 3.75p. The company is believed to have an administrator on standby. It also has the franchise to the Sandro fashion chain and a separate investment in a music retailer, Carbon, which operates within the Urban Outfitters chain.

Groupe Vivarte, which was acquired by PAI last year, has 2,500 fashion and shoe outlets across Europe, including the clothing brands La Halle, Parti Prix and Caroll, and the shoe chains Chaussland and La Halle aux Chaussures. The French group declined to comment yesterday on its plans for Kookai.

Forminster, which made a loss before tax of £770,000 in the year to February 2005, has said its shares will be suspended until the uncertainty over its relationship with Vivarte is resolved.