Billionaire Philip Day makes move for embattled Bonmarche

2nd Apr 2019 09:45

(Sharecast News) - Retail billionaire Philip Day has offered to buy Bonmarche for about £5.7m after purchasing more than half the struggling fashion chain's shares. Day, who owns Edinburgh Woollen Mill, bought more shares in Bonmarche through his Dubai-based investment vehicle Spectre to take his holding to 52.5%. That move triggered a mandatory takeover bid. Bonmarche said it was considering the offer.The offer of 11.445p a share in cash, based on the highest price Spectre has paid for its shares, is well below Monday's closing price of 18p. Bonmarche shares fell 22% to 14p at 0905 BST.Bonmarche, which specialises in clothing for over-50s women, has 312 shops and employs 1,900 full-time equivalent people. The chain has issued a series of profit warnings which it blamed on unprecedented bad trading conditions on the high street.Day would take the company private and review the business away from the short-term pressure of a stock market listing. He has snapped up Peacock, Austin Reed and Jaeger in recent years.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."Day intends to review Bonmarche's stores and close poorly performing ones unless rents, staff numbers and other costs can be cut. He will also seek to renegotiate deals with suppliers and boost margins by limiting discounts. Staff numbers and working practices at Bonmarche's warehouse will come under review but the site will not be closed.Russ Mould, investment director at AJ Bell, said: "Taking the business private and out of the City spotlight would theoretically help the retailer to focus on a recovery plan and not have its every move scrutinised by investors."However, shareholders aren't getting a good deal from the takeover so they would lose out should Day be successful in revitalising the business."