Move over Mike Ashley! High Street billionaire Philip Day pounces on struggling fashion firm Bonmarche with £5.7m bid to add 300-store chain to his retail empire
- Philip Day has made an offer for Bonmarche, valuing the firm at £5.7million
- Bonmarche endured slow sales and issued three profit warnings in six months
- Its share price has sunk 25 per cent today to a new low of 13.36p
Retail tycoon Mike Ashley momentarily lost the limelight today as another High Street billionaire stepped in to seize control of a struggling chain.
Edinburgh Woollen Mill and Peacocks owner Philip Day has pledged to buy stricken fashion chain Bonmarche – a move that would see the listed firm leave the stock market.
Bonmarche, which is based in Yorkshire and specialises in clothing for women over 50, has seen its shares crumble as it warned on profits three times in just six months.
Bonmarche was founded in 1982 and is based in Yorkshire. Its controlling shareholder is Philip Day, who today made an offer for the chain
It complained of a significant sales slowdown at the start of March, and a dismal November, and expects to make a loss of up to £6million this year.
Day, who has built up a controlling 52 per cent stake through holding company Spectre, has offered just £5.7million for the 300-store chain – significantly less than its market value as of last night.
Just five years ago the firm was worth nearly £100million.
‘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,’ said AJ Bell investment director Russ Mould.
‘However, shareholders aren’t getting a good deal from the takeover so they would lose out should Day be successful in revitalising the business,’ he explained.
Indeed, the possible takeover news triggered a sharp 25 per cent sell off in shares in early trading on Tuesday to a new low of 13.36p.
Bonmarche shares have crumbled from a 52-week high of 125p to just 13.36p this morning
Spectre said it would carry out a review of the chain and move to get a handle on costs by closing under-performing stores, cutting jobs and seeking lower rents.
It said: ‘Against the backdrop of the significant decline in Bonmarche’s profitability, Spectre believes it is well positioned to provide advice, guidance and support to secure the long term future of the Bonmarche 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 is often compared to Sports Direct founder Mike Ashley the pair have both been known to pounce on struggling retailers.
‘His approach is very similar to fellow retail mogul Ashley in that he likes to acquire troubled groups out of administration, or while they are on the knees when trading as a public company,’ Mould said.
Day went head-to-head with Ashley in the race to buy House of Fraser out of administration. And although he did not win that battle, the tycoon has made successful swoops for Austin Reed, Jaeger, Jacques Vert and Jane Norman.
Philip Day owns Peacocks Austin Reed, Jaeger, Jacques Vert and Jane Norman through his Edinburgh Woollen Mill group
He also owns Peacocks, Proquip and Country Casuals, and recently launched his own department store chain called Day’s.
Last week the mogul was named as a bidder in the race for collapsed LK Bennett, but later withdrew from the process.
‘This is an excellent result for Bonmarche,’ said Global Data research director Maureen Hinton.
‘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 Mill group.’