Three investors wrote to French Connection's chief executive and chairman Stephen Marks last Thursday to demand non-executive directors Dean Murray and Claire Kent leave the board after presiding over "a tremendous decline in value of the company".
City A.M. has learned that Marks indicated to the investors, which own 15 per cent of the company, that Murray and Kent will step down soon.
However, Liad Meidar, managing partner and chief investment officer at Gatemore, the investor leading the charge, said there was "no hard commitment" from Marks and that the letter was "thin in terms of content".
Investors Gatemore, OTK Holding and Zoar Invest have also demanded that Marks split the roles of chairman and chief executive.
In a brief letter to the investors, Marks acknowledged that his position in both jobs was in breach of the UK corporate governance code, but did not say he was willing to split the roles.
Gatemore has warned that French Connection may be forced to sell its Oxford Street store this summer if its cash reserves run out, and that its flawed corporate governance has brought about the company's decline. The mid-market fashion chain has been hit by losses for five years in a row.
"We demand the board move immediately to implement these governance changes and would like to see announcements indicating progress on this," the investors wrote in the letter to Marks.
"As an alternative, we would welcome the board to engage an investment bank to run a sale process and seek the highest possible bidder for the company."
Marks founded French Connection in 1972 and now owns 42 per cent of the company. However, Meidar said there was "a strong consensus for change" among the rest of French Connection's shareholders, and that Gatemore was willing to take further steps to keep the retailer in business.