Bonmarché in Philip Day offer U-turn as ‘poor’ trading continues
26 June 2019
Bonmarché’s board has said that poor trading during the first quarter means the offer made by Philip Day looks “more attractive”, despite not having been improved.
The embattled retailer put its poor first quarter trading down to “the continued weakness in the underlying clothing market” and a “lack of seasonal weather to counteract it” and said there was a “significant degree of uncertainty” as to whether it would achieve its profit target this financial year.
The fashion brand’s board also called on shareholders to accept the £5.7m offer made by Edinburgh Woollen Mill owner Philip Day in April, despite it still being of the view that the price “does not adequately reflect the potential longer-term value” of Bonmarché.
PwC, the retailer’s financial advisors, have questioned whether the business can continue as a going concern without an improvement in trading of the rest of the financial year, yet have also “expressed concern” over Day’s plans for the business.
Despite this, the board insisted that “the medium- and long-term prospects for the Bonmarché business are good” and said that Day’s experience in the retail sector would make him a “successful long-term owner”.
Day is currently the struggling retailer’s sole shareholder and has been locked in a battle with its board since early April, when he made an offer of £5.7m to acquire the remaining 47.6% stake in Bonmarché.
The board maintained throughout April and May that the figure “fundamentally undervalued” the business, and instead began planning cost-reductions that it hoped would improve its finances.
Day’s fashion group, Edinburgh Woollen Group, posted a decline in its full-year profits on Monday.
The group, which owns fascias such as Peacocks and Jaeger, made pre-tax profits of £81.2m in the 18 months to August 25, 2018, on sales of £935.8m.