Philip Day has warned of significant job losses at Bonmarché as the Edinburgh Woollen Mill owner bought out the private equity backer Sun Capital to take control of the struggling fashion chain.

On Tuesday, Day’s Dubai-based acquisition vehicle Spectre revealed it had paid £3m for 52.4% of Bonmarché’s shares at 11.445p each and offered to buy out remaining shareholders at the same price, valuing the business at £5.7m.

Shares in Bonmarché, which has more than 300 stores and concessions and employs more than 1,900 people, slid 17% on news of the bid, which is at a 24% discount to the company’s closing share price on Monday night.

The fashion retailer’s board said it was considering the offer and urged shareholders not to act for the time being.

Spectre said it had not held talks with Bonmarché’s management or inspected the retailer’s books but believed it could reduce costs by closing unprofitable stores, reducing the size of its head office, reviewing staffing at its distribution centre, reducing ranges and renegotiating supplier terms.

“Against the backdrop of the significant decline in Bonmarché’s profitability, Spectre believes it is well positioned to provide advice, guidance and support to secure the long-term future of the Bonmarché business, its stores and employees. The owner of Spectre, Philip Day, has a successful track record within the retail sector, especially in turnaround and distressed situations,” it said in a statement to the stock market.

Day, who also owns Jaeger, Austin Reed and Peacocks, said it would take three to four months following discussions with Bonmarché’s management to carry out a thorough review of the business which was likely to lead to a “material reduction in headcount across Bonmarché”.

The bid comes after Bonmarché issued the latest in a string of profits warnings earlier this month, saying it expected to make a loss of up to £6m this year. In December the company warned it would make a loss of £4m.