Bonmarché has fallen into administration today, putting 2,900 jobs at risk.
Tony Wright, Alastair Massey and Phil Pierce, partners at specialist business advisory firm FRP Advisory, have been appointed as joint administrators.
The Wakefield-based business employs 2,887 people, including 200 staff at its head office, and trades through 318 stores across the UK, online and by telephone.
Philip Day’s investment vehicle Spectre bought a majority share of the business in April, triggering a mandatory takeover bid. Bonmarché’s chief executive Helen Connolly and chief financial officer Stephen Alldridge sold their shares to Day’s company Spectre Holdings on 1 July, days after Day announced he was closing his offer to buy the remaining shares in Bonmarché for the price he paid, 11.45p, following poor trading at the retailer. On 28 June, Bonmarché’s third-largest shareholder, Cavendish Asset Management, also sold its 10.8% stake to Spectre.
The joint administrators will continue to trade Bonmarché while assessing options to secure a future for the business. All stores remain open and no redundancies have been made.
Bonmarché said directors took the step to place the business into administration after a “sustained period of challenging trading conditions and cashflow pressure”, which meant the business was unable to meet its financial obligations as they were due.
Connolly said: “It is with deep regret and sadness that we have appointed administrators. Over the last 18 months, trading in our stores and market conditions on the high street have significantly worsened. This has overwhelmed the business and its financial position. The high street is going through a period of historic difficulty and we have been unable to weather the economic headwinds impacting the whole of the retail sector.
“We have spent a number of months examining our business model and looking for alternatives. But we have been sadly forced to conclude that under the present terms of business, our model simply does not work. We have examined other options, including that of a CVA or refinancing, but do not believe these options will fundamentally change the core challenges facing the business. We are sadly no longer in a position to demonstrate to our shareholders that the business can continue as a going concern.
“Our market position has not been helped by the protracted economic uncertainty caused by the drawn-out Brexit process. The delay in Brexit has created negativities both in the global markets towards Britain and damaged consumer sentiment and retail footfall on the high street. These have compounded the challenges we were facing and without such a delay, it is feasible to believe that our issues would have been more manageable. Instead, it has only intensified the pressures.
“In the later stages of our struggle with these issues, Spectre became the majority shareholder of the business. We would like to thank Spectre and their team of advisors for their advice, guidance and support over the last few months. We believe that if we had had an opportunity to work with the Spectre team closely at an earlier stage, another outcome would have been possible.
“Our first priority is to our colleagues and their families in the face of this difficult news. This is not the outcome we had hoped for and we will work with the administrators to do all it possibly can to protect as many jobs as possible and work towards finding a buyer for the business that can secure its future going forward.”
A spokesman for Spectre said: “We are disappointed with the result of our investment in Bonmarche, but our primary thought at this time is with the business’ employees and families.”