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Bonmarche float is vote of confidence in sector

Analysts have predicted that Bonmarché’s public listing will be the first of many next year as investor confidence returns.

Sun European Partners, which acquired Bonmarché through a pre-pack administration deal in January 2012, plans to sell 40% of the 264-store business in November.

Shares will trade on the AIM market of the London Stock Exchange, typically home to smaller companies.

The deal is being handled by Investec bank and is expected to value the retailer, which targets women aged 50-plus, at £130m.

Cantor Fitzgerald investment analyst Freddie George said the float came as appetite among investors for clothing companies was growing.

He added: “Valuations have gone up across the sector. People are more confident about the retail outlook and more confident about the capital markets.”

Independent analyst Nick Bubb said: “There are a lot of IPOs in the pipeline, mostly for early 2014,

reflecting the big re-rating of the quoted sector and the increasing optimism about economic  recovery.

“These are dream conditions for IPOs, with potential valuations so much higher than seemed likely a

year ago.”

Nick Hood, business risk analyst at Company Watch, said Bonmarché’s move demonstrated the strength of the over-50s market.

“It might say more about the finances of the over-50s than the fashion industry itself,” Hood said. “It strikes me that this demographic is in better financial shape than its peers.”

“The IPO will demonstrate there is a place for well-managed niche retailers no matter how flat the market is.”

Figures from Kantar Worldpanel show that in the 24 weeks to September 1, spend by women over

50 on clothing, footwear and accessories for themselves accounted for 41% of the total womenswear market, an estimated £2.7bn and 6.8% higher than the same period last year. The average 50-plus woman spends £272 on fashion in six months, with 17% of that spent online.

In the year to March 30, Bonmarché generated sales of £147m, with EBITDA of £9.1m. Since the end of the financial year, like-for-like sales have continued to rise and are up more than 10% year on year.

Bonmarché chief executive Beth Butterwick said: “We are confident that our competitive position and loyal customer base means we are well-placed to capitalise on this attractive and fast-growing niche of the retail sector.”

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