Hundreds of jobs could be at risk at fashion chain Bonmarché as part of a takeover deal that plans to close its most underperforming stores.
Peacocks boss Philip Day has tabled an offer for the high street retailer, which has around 312 branches in the UK.
The deal values the Yorkshire-based chain at around £5.7million. Just five years ago the firm was worth nearly £100million.
Philip Day, the billionaire also behind the Edinburgh Woollen Mill Group, said he expected a "material reduction" in headcount at the chain if the deal goes ahead.
Bonmarché, which was founded in 1982, employs 1,900 full-time equivalent people in the UK.
The struggling retailer first warned last month that trading had deteriorated, adding that it expected to lose around £5 million this year.
Using his Dubai-based investment vehicle Spectre, Day has already bought a 52.4% stake in the retailer. As he now owns more than half of the company's shares, this has triggered a mandatory takeover bid.
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Bonmarché said its directors were "considering the terms" of the offer and advised shareholders to take no action.
If successful, Day said he would do a "store-by-store profitability assessment" with the aim of closing underperforming shops unless it was possible to implement "reduced rents, staff reductions or other cost saving measures".
He added he was "well positioned to provide advice, guidance and support to secure the long term future of the Bonmarché business, its stores and employees".
If the deal goes ahead, the company would become private and the shares delisted.
The businessman started his career at clothing manufacturers Coats Viyella and Wensum before eventually taking over Edinburgh Woollen Mill.
Spectre's statement said: "The owner of Spectre, Philip Day, has a successful track record within the retail sector, especially in turnaround and distressed situations."
Day also went head-to-head with Ashley in the race to buy House of Fraser out of administration, though his bid was unsuccessful.
He currently owns Peacocks, Proquip and Country Casuals, and recently launched his own department store chain called Day's.
"This is an excellent result for Bonmarché," said Global Data research director Maureen Hinton.
"Being taken out of constant City reporting and scrutiny will allow the retailer to take a long-term view of the business and benefit from the shared assets of the Edinburgh Woollen Mill group."
