Peacocks poised to sell Bonmarché

In September, business advisory firm KPMG was drafted in to conduct a review amid concern that Peacocks was going to breach its banking covenants. It is now set to oversee a pre-pack administration for Bonmarché.

Peacocks is in talks with Sun European partners, which last month acquired fellow mature brand Jacques Vert, and Hilco about a possible takeover.

The Peacock Group has tried twice to sell Bonmarché without success in order to restructure its capital base. It has around £240 million of debts to repay and is struggling with surplus of stores and leases.

Last March, private equity-owned Peacocks appointed representatives from DC Advisory Partners to look at options for Bonmarché. Private equity firm Duke Street pulled out of sale talks in July.

Peacocks is also thought to have asked its landlords if it can pay its rent monthly instead of quarterly, having faced a huge rent bill on December 25. While monthly leases are now common among high street retailers, leases that were signed some years ago do not allow that option.

The Peacocks Group operates around 387 Bonmarché stores, as well as 611 Peacocks shops. Retail sales at Bonmarché in the 53 weeks to April 3, 2010 rose 2.9% to £194.2m - a 0.8% like-for-like drop. Pre-tax profits were £5.5m compared with £936,000 the previous year.

A Peacocks spokesperson said: “We continue to progress our restructuring discussions and plans, with no decisions taken at this point.”