Bonmarché could be faced with store closures and job losses following a takeover bid by retail billionaire Philip Day.
Mr Day, who is the owner of the Edinburgh Woollen Mill Group, has bought a 52.4 per cent stake in the retailer and warned he expected a “material reduction” in headcount at the chain.
The struggling womenswear chain said last month that trade had deteriorated, with the brand adding it expected losses between £5 and £6 million this year.
Bought using his Dubai-based investment company Spectre, Mr Day’s stake in the retailer has triggered a mandatory takeover bid, as he now own’s more than half of the company’s shares. The deal values the chain at around £5.7 million.
Mr Day paid 11.445p per share, which is a third lower than Bonmarché’s closing price on Monday (1 April), when it was valued at £9 million.
The retailer said its directors were “considering the terms” of the offer and has advised its shareholders not to take action.
Cost saving measures
Mr Day will seek to take the company into private ownership and if the deal goes ahead, the shares will be delisted.
Thew new owner will carry out a detailed review of the retailer, including the pricing, viability of stores, supply chain, products, management of the business and a “store-by-store profitability assessment”.
Underperforming shops may be closed as a result of the review, unless it is possible to implement “reduced rents, staff reductions, or other cost saving measures”.
In a statement, Spectre said, “As a result of its review, and based purely on publicly available information, Spectre expects a material reduction in headcount across Bonmarché.
“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.”
Mr Day has previously bought several other clothing chains, including discount fashion retailer Peacocks, the upmarket Austin Reed and Jaegar brands.