Bonmarché

Closure of BadCo allowing company resource to focus on GoodCo strategy and development

Transaction background

• GA Europe engaged alongside PE house Sun Capital to acquire BonMarché via a Good Co/Bad Co structure.
• Acquisition was from within the administration of Peacocks, KPMG as Administrators.
• GA Europe was responsible for the closure of 165 stores, in parallel with Sun's negotiations for the assignment of the Good Co store leases.
• The transaction ran from 31 January 2012 to 23 March 2012.

Operational details

• The GA Europe team was comprised of 4 to 5 team members at the company's headquarters, with 25 field consultants.
• Very limited involvement of BonMarché team as focused on Good Co.
• GA Europe managed the closing stores along with the discount strategy and advertising, as well as managed in-store staff and supported the trade out with the augment of new season merchandise.
• Facilitated the unlocking of working capital via the sale of excess stock and pre-ordered stock no longer required for a smaller Good Co portfolio.

Outcome

• GA Europe was responsible for the realisation of approximately £6m sales proceeds, at a recovery rate in excess of 150% stock at cost.
• Sales multiplier was 1.3x broadly in line with plan, but trading extended for an additional two weeks in order to maximise recovery.
• Approximately 50 Stores moved back into New Co as a result of more favorable terms achieved from landlords.