Fashion chain Bonmarche is set to be sold for £10 million in a pre-pack administration deal expected lead to hundreds of job losses, it was reported today.
A judge is tomorrow expected to give the go-ahead for the stricken chain to be bought by US-backed private equity firm Sun European Partners, which also owns the Alexon and Jacques Vert brands, according to the Sunday Telegraph.
It is understood that Sun has earmarked more than 100 of the chain's 394 stores for closure, threatening hundreds of redundancies. But the deal will safeguard most of the 3,800 jobs in the viable stores.
Bonmarche, founded in 1982, was part of the Peacocks Group, which last week collapsed into administration under its £750 million debt mountain in the biggest retail failure since Woolworths, placing 9,600 jobs in jeopardy.
But whereas administrators were called in to take charge of the Peacocks chain, Bonmarche had been kept out of administration to allow sale talks to continue.
Pre-pack deals, where a chain is placed into administration and immediately bought in a previously-arranged deal, are controversial because they allow the new buyers to take on the chain but write-off many of its debts.
Bonmarche, which is based in Wakefield and was bought by Peacocks in 2002, will continue to be run as a separate entity and will not be merged with Sun's other retail brands.
The sale of Bonmarche will free up administrators at KPMG to look for a buyer for the Peacocks chain, which has 563 stores and 48 concessions.
It is understood that numerous private equity firms including Sun and clothing firm Edinburgh Woollen Mill are interested in buying the chain, while Tesco are reported to be interested in some of its stores.
Private equity firm Op Capita, which is in the process of buying Comet from Kesa Electricals, is also expected to assess Peacocks' potential.
A total of 50 firms are thought to have registered an interest and initial bids are expected by the end of the month.
The administrators, who have kept the stores open while they seek a buyer, last week made 249 staff at its head office in Cardiff redundant - nearly half the workforce.