According to a report from administrators FRP, creditors of Bonmarché, the clothing chain that collapsed in October 2019, are unlikely to receive the full amount of the £23.9 million owed to them. The company was taken over by retail tycoon Philip Day just three months before it went into administration, citing challenging trading conditions and cashflow pressure as the reasons for its financial difficulties.
Nine parties have expressed interest in acquiring parts or all of the fashion brand, with Peacocks, a member of Day’s Edinburgh Woollen Mill Group, emerging as the preferred bidder. While a potential sale to Peacocks may generate funds to pay off some debts, it is uncertain whether it will be sufficient to cover all the obligations. The creditors include suppliers, who are owed £12.6 million, and HMRC, which is owed £1.1 million.
Philip Day, who is valued at £1.2 billion, has acquired distressed fashion brands such as Austin Reed, Jane Norman, and Jaeger in recent years. Bonmarché, which previously had over 300 stores and concessions across the UK, has already closed some underperforming stores since entering administration.
In conclusion, the creditors of Bonmarché are facing the possibility of not receiving the full amount owed to them, as the collapsed clothing chain seeks a buyer. While Peacocks is currently the preferred bidder, it remains uncertain whether the potential sale will generate enough funds to cover all the financial obligations. The plight of Bonmarché highlights the challenges faced by the retail industry, in line with the difficulties experienced by other fashion brands that have fallen under Philip Day’s ownership.