The board of struggling women’s value clothing retailer Bonmarche Holdings Plc has swung in favour of an offer for the business from the owner of Edinburgh Woollen Mill, amid poor trading during the first quarter.
Dubai-based investment firm Spectre Holdings, led by Philip Day, made a GBP5.7m takeover bid for Bonmarché back in May.
While again saying the offer “does not adequately reflect the potential longer-term value of the business,” the board now concedes it is now “more attractive” in light of its current trading and financial position – and recommends shareholders accept it.
The change of heart comes amid “continued weakness in the underlying clothing market, and a lack of seasonal weather to counteract it, particularly in June.
“In previous years, there would have been an expectation that at some stage during the selling season, better weather would generate a sales peak to offset the dip experienced during the first quarter but, in our experience, the current clothing market is not following the patterns of previous years,” the retailer says.
It also believes that once the near term has been weathered, “the medium and long term prospects for the Bonmarché business are good.”
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By GlobalDataThe company adds that Day, “with his sector experience…would be a successful long term owner.”
When Spectre Holdings bought a 52.4% stake in Bonmarché in May it triggered a mandatory takeover bid that would also see the listed company taken private.
Spectre also said it would look to “reduce the cost base to a sustainable level whilst minimising the impact on operational performance,” warning of a “material reduction in headcount” across Bonmarché. According to its website, Bonmarché employs 1900 full-time equivalent staff and has 312 shops.
Day’s EWM empire includes brands such as Jaeger and Peacocks.
