Bonmarche has recently issued a series of profit warnings

Bonmarche has recently issued a series of profit warnings

A Dubai-based investment firm led by the owner of Edinburgh Woollen Mill, Philip Day, has submitted a GBP5.7m takeover bid for struggling British fashion retailer Bonmarché.

Day's investment vehicle Spectre Holdings has bought a 52.4% stake in the retailer, triggering a mandatory takeover bid – and says it is "well positioned to provide advice, guidance and support to secure the long term future of the Bonmarché business, its stores and employees" and that its owner has a "successful track record within the retail sector, especially in turnaround and distressed situations."

Bonmarché has released several negative trading updates recently, with shares tumbling last month following a profit warning on the back of weaker trading. The retailer forecast underlying profit before tax loss for the year of between GBP5m and GBP6m (US$6.64bn-$7.97bn), compared to a range of breakeven to a loss of GBP4m forecast in December. 

Should the Spectre Holdings deal go ahead, London Stock Exchange-listed Bonmarche will be delisted and become a private company.

Spectre says it will conduct a portfolio review with the intention of ensuring the long-term future of the business, adding this would be through a portfolio of profitable stores and concessions across the UK and via other channels (including its website).

The group also says it will 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.

For its part, Bonmarché says it is considering the terms of the offer.

Maureen Hinton, global retail research director at GlobalData, believes Bonmarché has "found a saviour in Philip Day," noting: "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."