Troubled Wakefield fashion firm Bonmarché said on Wednesday that recent trading has been so poor that it now recommends shareholders accept billionaire businessman Philip Day’s cut-price buyout offer — two months after dismissing it as “inadequate.”

Shares in Bonmarché fell another 22% to around 12p, having fallen from around 119p at this time last year.

On April 12 Bonmarché rebuffed the £5.7 million takeover offer from Day, saying it “materially undervalues” the company.

Day, who made his fortune with Edinburgh Woollen Mill, recently bought 52.4% of the shares in Bonmarché from a subsidiary of private equity group Sun Capital at 11.445p a share.

The acquisition of the stake triggered a mandatory offer for the rest of Bonmarché’s shares.

On Wednesday, Bonmarché said: “Trading during the first quarter of the new financial year has been poor, primarily due to continued weakness in the underlying clothing market, and a lack of seasonal weather to counteract it, particularly in June.

“In previous years, there would have been an expectation that at some stage during the selling season, better weather would generate a sales peak to offset the dip experienced during the first quarter but, in our experience, the current clothing market is not following the patterns of previous years …”

On Day’s offer, Bonmarché said: “Whilst the board’s view remains that the offer does not adequately reflect the potential longer term value of the business, the increase in uncertainty that has developed reflecting the trading and financial position of the business during the first quarter of the financial year makes the certainty represented by the offer potentially more attractive in the short term.

“As a result, the board of Bonmarché, which has been so advised by Investec as to the financial terms of the offer, is now of the view that the terms of the offer are fair and reasonable.

“The board therefore recommends that shareholders accept the offer, as they intend to do so in respect of their own beneficial holdings …

“The board believes that once the near term has been weathered, the medium and long term prospects for the Bonmarché business are good.

“The board continues to welcome the opportunity to engage with Mr Day, who has, as yet, not taken up the offer to discuss future plans for the business, and believes that, with his sector experience, he would be a successful long term owner.”

Paul Mumford, a fund manager at Cavendish Asset Management, which has a 10.8% stake in Bonmarche, told Reuters: “Bonmarche has simply capitulated without consulting majority shareholders.

“Given that Debenhams, M&S and House of Fraser are disappearing from the high street, Bonmarche was in a good position to be the ‘last man standing’, meaning we could have seen an increase in footfall.”