Bonmarché has warned prospective buyer Philip Day that his recent bid “undervalues” the business, but has offered further talks. 

The struggling fashion retailer said the offer it received through Day’s Spectre Holdings group on April 2 “materially undervalues Bonmarché and its future prospects”.

The retailer added that prior to Day’s offer the business had been planning “a number of cost-reduction actions across the group and anticipates starting the implementation of these shortly.” 

Bonmarché said that it’s board had “sought to engage with Philip Day to discuss the future plans for the business for the benefits of all stakeholders” as the majority shareholder of the business.

“The board continues to seek positive engagement with Philip Day and looks forward to discussions in due course,” said the retailer, adding that it would be writing to shareholders with its formal response to Day’s offer  ”once the offer document has been posted by Spectre.”

Under Takeover Code rules, any shareholder with a stake of more than 30% is required to make a full takeover offer for the business. 

Bonmarché called on its shareholders to take no action on the 11.45p per share made by the Dubai-registered Spectre. Day has a 52.4% stake.

Day, who runs Edinburgh Woollen Mill, made a bid that valued Bonmarché at £5.7m and hoped to take the business private. Day made his move for the fashion chain after a torrid fourth trading quarter led to it issuing its third profit warning in six months.

Since leading a management buyout of EWM in 2002, Day has expanded the retailer’s portfolio of high street names, acquiring Austin Reed, Jaeger, Country Casuals, Jacques Vert and Peacocks.

Peacocks owned Bonmarché until early 2012 when it sold the business to Sun European Partners in a pre-pack administration deal.