Private equity firm Sun European Partners has bought women’s plus-sized clothing chain Bonmarché in a pre-pack administration deal from KPMG, the administrator for embattled value clothing retailer Peacocks.
Although Sun European will keep 230 stores and retain the jobs of 2,400 employees, around 160 stores will close as part of the deal, which could result in around 1,000 redundancies.
Bonmarché was founded in 1982 and bought out by the Peacock Group in 2002. Although financial terms of the deal have not been disclosed, the price for Bonmarché is reported to be less than £10m.
The deal will free up capital to service Peacocks’ £240m worth of net debt and help to temporarily stave off administration talks with lenders, including Royal Bank of Scotland, and shareholders, including Goldman Sachs and hedge funds Och Ziff and Perry Capital.
Despite the company’s debt, Peacocks generated EBITDA of about £70m last year, meaning that the business is still profitable. The group also posted promising like for like sales growth during Christmas trading period, making it a lucrative target for a private equity buyer.
This morning new reports revealed that turnaround specialist OpCapita is among a handful potential buyers that are preparing offers for Peacocks. KPMG today opened a ‘data room’ where interested bidders can look through confidential data in a secure setting before bids are due on 30 January.
Other interested parties eyeing the chain include retailer Edinburgh Woollen Mill, which is involved in current talks to buy the company, and trade buyers including Poundland and Tesco, which could buy the chain if current deal talks fall through.
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