Industry sources speculated this week that Edinburgh Woollen Mill owner Philip Day would buy back Bonmarché out of administration, while observing there was “a lot of work to do” to revive the failed value retailer.
Tony Wright, Alastair Massey and Phil Pierce, partners at specialist business advisory firm FRP Advisory, were appointed as joint administrators on 18 October, following a “sustained period of challenging trading conditions and cashflow pressure”.
The administrators said they will continue to trade Bonmarché while assessing options to secure a future of the business. All stores remain open and no redundancies have been made as yet. The Wakefield-based business employs 2,887 people and has 318 stores across the UK.
Industry insiders have questioned the speed of the retailer’s decline following its takeover by Day. His investment vehicle, Spectre, bought a majority share of the business in April, triggering a mandatory takeover bid, which completed in July.
A former member of the Edinburgh Woollen Mill Group team speculated that Day put the company into administration to “then buy it back without the debt”.
“He did the same with Austin Reed, Jaeger and Berwin & Berwin. It is a formula which is legal, despite being a bit close to the wind.”
One value retail supplier also questioned Day’s motives: “I can’t understand why someone would buy a company just to [put it into administration], unless they wanted to buy it back as a debt-free business and make a big profit.”
However, one source close to Bonmarché argued this was not the case: “If Day wanted to put the company into administration to buy it back with less debt, then he would have done a pre-pack administration.” Edinburgh Woollen Mill Group declined to comment.
Whether Day buys back Bonmarché or not, fundamental problems – its product offering, large store portfolio and lack of identity – would need to be addressed, said experts.
“Unfortunately, it’s another example of a retailer who hasn’t been able to restructure the business fast enough to meet today’s new trading realities,” said Richard Lim, chief executive at Retail Economics.
“[It] has too many stores, unsuitable space and can’t pivot its business model fast enough because of inflexible lease structures, and years of under-investment in online.”
One Bonmarché supplier said the retailer needs to improve its product offering: “Last season it went far too casual, which messed everything up. They’ve been trying to go much younger, but that’s not their target customer. Bonmarché’s core customer is 50 and over, and they need to bring back some of the old styles that worked, otherwise its future looks like a jumble sale.”
Nicole Higgins, founder of retail consultancy The Buyer and Retail Coach, said Bonmarché has a future if it can offer a distinct identity: “Bonmarché as a business has great potential, [as it caters to] a niche market. [But] it needs to play catch-up, as other brands have become more successful in that space with active marketing, strong social media and a good understanding of their customer.”
Fashion brand consultant and former Next womenswear buyer, Elizabeth Stiles, agreed: “Although Bonmarché is cheap, that is not the message it pushes out online. It’s gotten lost in the mid-market: are they cheap or plus-size? Bonmarché needs to pick up on its marketing by picking an axis and completely nailing that.”