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Bonmarché moves step closer to sale

The Peacock Group has entered exclusive talks with private equity investor Duke Street about a sale of its mainstream womenswear chain Bonmarché.

Peacock Group, which also owns value retailer Peacocks, last month appointed DC Advisory Partners to look at options for Bonmarché.

Peacock Group explored several sale or refinancing options for the business, including the Peacocks chain, as recently as last year, but potential investors previously baulked at the £500m to £600m price tag attached to the whole business.

It is unclear how much Duke Street would be prepared to pay for 387-store Bonmarché, which targets women aged 45 and over.

Retail sales at Bonmarché in the 53 weeks to April 3, 2010 rose 2.9% to £194.2m - a 0.8% like-for-like drop. Pre-tax profits were £5.5m compared with £936,000 the previous year. It is understood to have performed well in the year just ended.

Duke Street’s investments include discount department store chain The Original Factory Shop. It only takes majority stakes in businesses with headquarters in the UK and France, with an enterprise value of between €50m (£44m) and €300m (£264m).

Peacock Group bought Bonmarché from previous owners the Chima brothers in 2002 for more than £50m.

In 2005, Peacock Group was taken private in a £420m deal led by chief executive Richard Kirk, Goldman Sachs and hedge funds Och-Ziff and Perry Capital.
In February, the group said it intended to appoint a chairman for the first time in five years, prompting speculation it was gearing up to float. However, Kirk, who owns 30% of the business, said it did not indicate that the business was set for an IPO.

Peacock Group declined to comment and Duke Street was unavailable for comment as Drapers went to press.

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