At least 30 Bonmarché stores are to close next month with the loss of about 240 jobs, as previous owner Philip Day prepares to buy back the remaining chain out of administration.
The Peacocks chain, which is part of Day’s Edinburgh Woollen Mill group, has been named by administrators at FRP advisory as preferred bidder for Bonmarché, which continues to trade from 285 stores. The deal would hand back ownership to Day, whose Spectre investment vehicle took control of Bonmarché shortly before it fell into administration in October.
FRP, which has been seeking a buyer for the fashion chain, said it had considered “numerous offers from a range of interested parties for all or parts of the business” but believed the Peacocks bid was the best on the table.
The administrators hope to complete a deal before Christmas that would reunite Bonmarché with its former sister chain Peacocks. The companies have operated separately since they jointly went into administration in 2012.
Tony Wright, joint administrator and partner at FRP Advisory, said: “We have now begun advanced negotiations with Peacocks on a going concern basis and aim to complete a transaction that will maximise returns for creditors, but also provide the best opportunity to keep the retailer open and protect the greatest number of jobs.
He said Bonmarché’s future was still dependent on negotiations between Peacocks and landlords on rents and there remained a risk that the business could cease to trade.
More than one landlord told the Guardian that they had been approached about rent-free deals in recent months.
Bonmarché’s collapse came after it was taken private by Day’s Dubai-based acquisition vehicle Spectre in August. Day’s £5m-plus investment in Bonmarché was wiped out in the administration. But the entrepreneur, who also owns Edinburgh Woollen Mill, Jaeger and Austin Reed, is understood to own a chunk of Bonmarché’s debt – giving him control over the group’s future.
Founded in 1982, Bonmarché, is the latest high street chain to get into difficulties as shoppers rein in spending amid economic uncertainty while staff costs and business rates have risen.
Bonmarché has issued a series of profits warnings in the past year, saying it expected to make a loss of up to £6m this year.