FASHION retailer Bonmarche is to float on the stock market next month in a £130 million move that will net a hefty profit for its private equity owner.
It also marks a turnaround for the business bought from former owner Peacocks after it crashed into administration less than two years ago.
The 264-strong clothing and accessories chain, which caters for women aged 50 plus, hopes to cash in on Britain’s ageing population and recovering consumer spending by expanding its footprint and range.
Owner Sun European Partners is expected to sell some £50m of shares to institutions to give the retailer a market value of up to £130m.
The move is the latest in a flurry of stock-market flotations – including estate agency Foxtons and the Royal Mail – as confidence returns.
Bonmarche, which operates 13 stores across Scotland, was bought by Sun European Partners in January 2012 for a reported £10m after Peacocks hit difficulties. Most of the shops carrying the Peacocks name were acquired by Edinburgh Woollen Mill.
Bonmarche, which opened its first store, in Doncaster, in 1985, said it has been transformed since the buyout, with like-for-like sales surging almost 13 per cent over the past six months and a “step change in profitability”.
It plans to expand at garden centres across the UK, on cruise ships and also has tie-ups with about 1,000 care homes, where staff host sales events.
The chain also has a mail order arm, phone ordering service and TV shopping channel, and around 6.5 million women are signed up to its loyalty programme. The flotation will raise money for its owners rather than the company, and will mean at least 40 per cent of its shares are traded on the Alternative Investment Market (Aim). Management hold almost 8 per cent and are not selling down their stake.
Chief executive Beth 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 is 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.”
Bonmarche, based in Wakefield, said it has few direct competitors and none of its stores are loss-making.
It earned underlying profits of £9.1m on revenues of £146.8m in the year to the end of March.
At the time of Peacocks’ collapse, Bonmarche had 3,800 staff and 394 stores. Bonmarche was sold in a pre-pack administration deal to Sun before it closed 160 stores.
The chain, which now has 1,700 staff, said it expects to benefit from a predicted 16 per cent growth in the number of women aged over 55 during the decade to 2018.
Debt-laden Peacocks, which bought Bonmarche in 2002, was forced into administration by tough conditions on the high street.
The Peacocks chain was sold to Dumfriesshire-based Edinburgh Woollen Mill last February in an emergency rescue deal that has saved two-thirds of its stores but will still result in more than 3,000 job losses.