Bonmarché is being bought by Philip Day, owner of The Edinburgh Woollen Mill Group.
Day is expected to spend about £2.7m on the acquisition, which is taking place via a new Dubai-based company, Spectre, set up for the purposes of the deal. The offer is mandatory under the takeover code after Spectre’s holding in the business increased to more than 30% – it now owns 52.4% of issued shares and has offered 11.445p each for the remaining hares.
The multichannel retailer, founded in 1982, will join companies including Peacocks, Austin Reed, Jaeger and Jacques Vert in Day’s ownership.
Bonmarché sells online, through stores, mail order and through the Ideal World TV Shopping Channel. Its new owner Spectre said in today’s announcement that it recognised the importance of the Bonmarché management team and employees to the future success of the business, although it reserved the right to make changes if necessary. It does not currently aim to close its head office.
Spectre will now assess the profitability of its stores and review its range, with a view to rationalising it. It will also revisit its logistics arrangements, and review its online fulfilment and digital marketing processes.
The deal comes at a time when Bonmarché has steadily warned on pre-tax profits – its latest update warned that full-year losses would come in at between £5m and £6m, and that it had been left with autumn and winter stock that it could only clear through “heavy” sale discounting. At the time it said that it would have enough cash to survive even if its losses came in at the bottom of expectations – but today’s news has been welcomed by Maureen Hinton, global research director at data and analytics company GlobalData. “This is an excellent results for Bonmarché,” she said, adding: “It rejoins its former sister company Jane Norman, which Day saved several years ago and continued to trade. Being taken out of constant City reporting and scrutiny will allow the retailer to take a long-term view of the business and benefit from the shared assets of the Edinburgh Woollen Mills group.”
Image: Screenshot of Bonmarché home page, InternetRetailing Media