Written by: Keith Tully
Published: 27th June 2019
Bosses at the women’s clothing retailer Bonmarche have recommended to shareholders that they reconsider a rescue bid that was rejected when it was initially made in April.
A period of tough trading in the first half of 2019 has prompted a change of attitude at the top of the company, with cashflow concerns apparently rising up the agenda.
Statements given by Bonmarche describe the business’ trading and performance during the first quarter of its new financial year as having been “poor”, with an “underlying weakness in the clothing market” cited as a key reason.
“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 company said.
Recent statements describe Bonmarche as having “adequate liquidity” but its auditors have made clear that its financial situation and current performance creates at least a degree of “uncertainty with regard to going concern”.
As a consequence, it has been recommended that shareholders look again at the takeover offer made for the business by the billionaire businessman Philip Day, who already owns a majority of Bonmarche shares.
Mr Day was obliged to make an offer for the remaining shares in Bonmarche that he didn’t own after he increased his shareholding to an overall majority.
However, the offer that was made, worth £5.7 million, was described in April by the company’s board as undervaluing the business and its prospects for the future.
In light of its ongoing difficulties and the problems being grappled with by retailers across the country, Bonmarche’s board has now changed its recommendation to shareholders and pointed to “the certainty represented by the offer” as potentially appealing.
“The board therefore recommends that shareholders accept the offer, as they intend to do so in respect of their own beneficial holdings,” statements given Bonmarche’s bosses read.
There are currently more than 300 Bonmarche outlets across the UK.