Bonmarché has reported poor first quarter trading, forcing its leadership to change its mind on a takeover bid from Philip Day.

The fashion retailer said it was uncertain whether it would meet profit targets for the full year, mainly due to a weak clothing market and unseasonable weather.

A statement explained that therefore, the offer of £5.7 million from retail tycoon Day’s Spectre Holdings now appears more attractive. When that bid was originally made in April, the company said it “materially undervalued” the business and its future prospects.

Bonmarché now recommended that shareholders accept the offer, as it believes Day would be a successful long-term owner.

“While the board’s view remains that the offer does not adequately reflect the potential longer-term value of the business, the increase in uncertainty that has developed reflecting the trading and financial position of the business during the first quarter of the financial year makes the certainty represented by the offer potentially more attractive in the short term.”

Day - who also owns Peacocks, Austin Reed and Jaeger - made the bid as part of his Dubai-based investment vehicle, which holds more than 26 million shares, placing it above the 30 per cent threshold for a takeover approach. It got to this position after buying out private equity backer Sun Capital for nearly £3 million, achieving a 52.4 per cent stake.

A stock exchange statement in April explained that a complete a store-by-store profitability assessment would be undertaken, with the intention of identifying all current stores that “do not make an acceptable contribution to the performance of the business as a result of inappropriate rent levels, staffing levels, or other factors”.

Those identified as underperforming may be closed unless reduced rents, staff reductions or other cost-saving measures can be successfully implemented. “As a result of its review, and based purely on publicly available information, Spectre expects a material reduction in headcount across Bonmarché,” it added.

Bonmarché has a footprint of over 300 stores and concessions across the UK and currently employs around 1,900 full-time staff.

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