Philip Day and Mike Ashley Battle for U.K. Retail King Title

(Bloomberg) -- Retail tycoon Philip Day is bidding for Bonmarche Holdings Plc after buying a majority stake in the U.K. clothing chain, as he vies with billionaire Mike Ashley to dominate the nation’s struggling high street.

Day is required to make a mandatory cash offer for Bonmarche at about 11.44 pence a share after acquiring 52 percent of voting rights in the company at that price, according to a statement Tuesday. The price is 36 percent below Monday’s closing level for Bonmarche shares. The board is considering the proposal and advises shareholders to take no action for now, Bonmarche said in a separate statement.

Ashley and Day are among the few investors willing to brave the carnage in U.K. brick-and-mortar retailers, who have been hurt by the growing clout of online merchants and consumer sentiment that has been depressed by the endless Brexit saga.

Day, who owns retailer Edinburgh Woollen Mill, considered a last-minute bid for collapsed U.K. fashion brand LK Bennett Ltd. before walking away, according to news reports. The 53-year-old investor also was in talks to buy a number of Marks and Spencer Group Plc and House of Fraser stores that are scheduled to close, the Telegraph said in February. He previously acquired brands such as Austin Reed, Jaeger, Jane Norman and Peacock.

Meanwhile, Ashley, the founder and chief executive officer of Sports Direct International Plc, is in a tug of war with Debenhams Plc creditors and the board over the company’s future, in which the sports retailer owns about a 30 percent stake. It also made a mandatory offer for British catalog retailer Findel Plc last month, which the board rejected. Among other investments, Ashley also owns House of Fraser as well as stakes in Game Digital Plc and French Connection Group Plc through Sports Direct.

If successful with the Bonmarche acquisition, Day plans to undertake a strategic review and look to cut costs, potentially closing stores that are identified as underperforming, according to Tuesday’s statement.

Bonmarche shares fell 17 percent to 15 pence at 10:28 a.m. in London, giving the company a market value of 7.5 million pounds. The company, based in Wakefield, England, operates more than 300 stores selling women’s clothing. Its stock has plunged 95 percent from its peak in 2015.

To contact the reporter on this story: Lisa Pham in London at lpham14@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Phil Serafino, Jon Menon

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