Bonmarche to net £40m from market float

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Bonmarche, the value fashion chain that focuses on the over 50s market, will raise £40m from its float on AIM next week.

The Wakefield-based company has priced its shares at 200p ahead of its debut on Wednesday.

Bonmarche hopes to cash in on Britain’s ageing population and recovering consumer spending by expanding its footprint and range.

Chief executive Beth Butterwick said: “We are delighted to announce that our initial public offering has been successfully received.

“We would like to welcome our new shareholders and are looking forward to the next stage in the development of the business as a publicly quoted company.”

Bonmarche claims to be the UK’s largest value retailer for ladies plus size clothes, ranging from sizes 12 to 32.

The float comes less than two years after it was bought out of administration by a private equity firm.

Founded in 1982, the Bonmarche business was acquired by an affiliate of Sun European Partners in January 2012 from administrators KPMG after previous owner Peacocks, saddled with £240m of debt, went into administration.

The group, which has a customer database of 6.5 million members, sells from 265 stores, a website, mail order catalogues, a telephone order service and through a TV shopping channel.

It was awarded ‘Britain’s Best Women’s Clothing Retailer’ at the Verdict Research Awards 2012 and came second in the ‘Nation’s Favourite Retailer’ category.

Its range includes casual and formal separates, outerwear, dresses, swimwear, lingerie, nightwear and accessories in addition to the Bonmarche collection by formal Royal couturier David Emanuel.

Bonmarche was established in 1982 by two brothers who began their business on market stalls and opened their first store in Doncaster.

The business expanded very quickly to a portfolio of over 200 stores before being acquired in 2002 by Peacocks, a value fashion retailer targeting the over-25 female shopper.

As a subsidiary of Peacocks, the business grew rapidly and was operating from over 390 stores by January 2012 before Peacocks ran into financial difficulties. As the average age of the UK population increases, Bonmarche said it is well placed to take advantage of its strong market position, given the limited number of rivals who focus on value fashion for the over 50s.

Its clothes are mainly own-brand and are mostly sold through its own stores.

In the year to March 30, the group generated earnings of £9.1m on revenue of £146.8m and in the half year to September 28, it reported earnings of £6.7m on revenue of £81.5m.

Bonmarche plans to expand into garden centres across the UK, on cruise ships and also has tie-ups with around 1,000 care homes, where staff hold sales events on the premises.

The flotation will raise money for its owners rather than the company.

Management hold almost eight per cent and are not selling down their stake.

Ms Butterwick said: “The success and strong financial performance enjoyed by the business over the last 18 months, coupled with our exciting growth strategy, makes this an opportune time to bring the company to AIM.

“We are confident that our competitive position and loyal customer base means that we are well placed to capitalise on this attractive and fast-growing niche of the retail sector.”

The UK womenswear clothing market was estimated to be worth £21.9bn in 2013 by Verdict and it is forecast to grow by 15.4 per cent by 2017.

Within this market, the value segment is expected to grow at a faster rate and take a greater market share.