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Fund managers slam "incompetent" Bonmarché bosses as they sell out to Philip Day

Press Association
28 June 2019

Fund managers at Cavendish have slammed the “incompetent” bosses of Bonmarché, as they sold their stake in the company amid a takeover bid from Philip Day.

The asset management firm revealed on Friday that it had offloaded its 10.8% stake, selling more than five million shares at 11.4p each, the price proposed by Edinburgh Woollen Mill owner Day.

It comes a day after Day’s holding company, Spectre, said it felt forced to close its offer for shares in the company, following a recent update which showed a decline in Bonmarché’s trading.

The offer is open for the next two weeks in accordance with stock market rules and could see Day take the company off the stock market if he gains more than three-quarters of the issued shares. It is understood that Spectre’s current holding is above 65%.

Cavendish has previously said Spectre’s offer was too low, but fund managers Paul Mumford and Nick Burchett told the Press Association they had bailed out to avoid holding a stake in a delisted company.

Mumford also said it was “disgraceful” that Bonmarché’s board had done a U-turn with regard to Spectre’s offer this week, recommending the takeover after previously rebuffing it. He said the debacle was down to “sheer incompetent management”.

“They’ve caved in and they’ve said there’s no alternative,” he said “They’ve just sort of thrown in the towel. We’re heartily fed up of that and unfortunately decided to move on.”

Fears for the future of Bonmarché emerged earlier this week as it updated the market on its trading performance and recommended Day’s takeover.

The clothing chain revealed on Wednesday that its auditor may include a reference to the “uncertainty with regard to going concern” in full-year accounts due to the trading troubles and without any sign of improvement in revenues.

Cavendish’s exit puts Spectre a step closer to taking full control of the business and delisting it from the stock market.

Burchett said Day was likely to “do exactly what the management should have done in the first place. They should have had another go at making radical changes.”

Day has a track record of rescuing struggling retail businesses, having acquired the failed Jaeger in 2017. Recent accounts showed that Jaeger’s losses have halved under Edinburgh Woollen Mill Group’s ownership.

Mumford said that although he still considered the offer too low, Day’s plans for the brand are “eminently sensible”.

I’m sure he’ll pull it round and we would have liked to be on that journey. And I think he’s going to make a lot of money out of that.”

Shareholders have until 12 July to decide whether to sell up, after Spectre gave notice that the offer would close.

Artemis Investment Management still owns 12.5% of the company. The firm declined to comment on its position.

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