It said was selling Nicole Farhi to US private equity firm OpenGate Capital for up to £5m in order to make it leaner and more profitable.
And it will close 17 US outlets at a cost of about £6.5m, cutting its retail presence in that country to six stores.
The group, which has previously divested businesses in Japan and Northern Europe, said post-tax losses widened to £24.9m in the year to 31 January, from £16.4m in the previous year.
But the businesses it is hanging on to made an operating profit of £1.3m on a one per cent rise in revenue to £200.3m. Like-for-like sales at UK and European businesses that are being retained rose 2.8 per cent.
French Connection has suffered in recent years as it struggled to reposition itself after the popularity of its FCUK brand waned even before the slump.
“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 the restructuring complete, analysts suggested founder, chairman, chief executive and 42 per cent shareholder Stephen Marks could take the firm private could resurface.
Company spokesman Neil Williams said: “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.”