OVER-FIFTIES clothing chain Bonmarché kicked off its first day of trading yesterday on London’s junior market after an initial public offering that raised £40m.
Shares closed up at 220.5p last night, above the original offer price set last week of 200p a share and valuing the retailer at £110m.
Some analysts have criticised the company for being valued too cheaply, with retail analyst Nick Bubb describing the valuation as “underwhelming”.
Founded in 1982, Bonmarché has 264 stores and also trades through its website, mail order catalogues, a telephone order service and a TV shopping channel.
Private equity group Sun European bought the chain out of administration in 2012 after its parent company Peacocks collapsed.
Since then, management has been cutting costs and closing underperforming stores in a bid to turn the business around.
Efforts have since paid off with Bonmarché reporting over £10m of net cash at the end of September.
Like-for-like sales grew by 12.7 per cent in the six months to 28 September and the company posted an 80 per cent rise in underlying cash profit.
Bonmarché, which is led by chief executive Beth Butterwick, has also argued it is well placed to benefit from the growing over-50s demographic in the UK and cited figures from the Office of National Statistics and Verdict that forecast the number of women over the age of 55 to rise by 16 per cent between 2008 and 2018.
It also hopes to tap into the growing number of cash-strapped shoppers seeking out cheaper deals.
Investec acted as financial adviser, nominated adviser and broker to the company.