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Philip Day snaps up Bonmarché

Edinburgh Woollen Mill Group owner Philip Day has acquired a majority shareholding in Bonmarché in a deal that values the retailer at £5.7m.

Day’s Spectre Holdings has purchased 52.4% of Bonmarché’s ordinary shares, triggering a mandatory takeover bid. Spectre has offered to buy the remainder of the shares for the price it paid, 11.45p.

Bonmarché said its directors are considering the terms of the deal.

In a statement, Spectre said: “Against the backdrop of the significant decline in Bonmarché’s profitability, Spectre believes it is well positioned to provide advice, guidance and support to secure the long-term future of the Bonmarché business, its stores and employees.

“The owner of Spectre, Philip Day, has a successful track record within the retail sector, especially in turnaround and distressed situations.”

Spectre added that it intends to reduce Bonmarché’s cost base to a sustainable level, while minimising the impact on operational performance.

The company will complete a store-by-store profitability assessment, and underperforming shops may be closed unless reduced rents, staff reductions or other cost-saving measures can be successfully implemented.

Spectre said it will review the current product range and future range plans as it believes Bonmarché would benefit from “range rationalisation and a more attractive and coherent proposition” for its customer, which would include reducing the number of SKUs.

It will also review the retailer’s pricing policy and discount strategy, and implement a “first price, right price” policy.

Spectre will also renegotiate supplier terms where it believes these are currently less commercial than available in the wider market.

In December, Bonmarché issued a profit warning for the 2018/19 financial year, citing “extremely poor” Black Friday sales and ongoing Brexit uncertainty. 

It said at the time that it expected underlying profit before tax to be in the range of “break even” to a loss of £4m for the current financial year.

It posted a second profit warning in March after total sales for the 13 weeks to 29 December fell 8.1% year on year. 

Bonmarché now estimates that the underlying loss before tax for the year will be between £5m and £6m.

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