Best & Less primed for facelift as retail veterans lob takeover bid

Discount retailer Best & Less looks set for a facelift that experts say could boost its appeal with younger shoppers, after retail veterans Brett Blundy and Ray Itaoui made an offer for the company on Monday.

The duo’s offer of $1.89 per share was close to 5 per cent lower than where the stock closed on Friday, but was still enough to pique the interest of the company’s major investors after a bumpy couple of years for the apparel brand, which listed on the ASX in 2021.

Brett Blundy is teaming with Ray Itaoui in a bid for discount clothing retailer Best & Less.Credit: Louise Kennerley

Fund manager Allegro, which owns 32.4 per cent of the business, and Bignor, a company associated with Best & Less executive chairman Jason Murray and which owns more than 8 per cent, both backed the deal in the absence of a better offer.

The offer comes after a turbulent couple of years for the discount clothing retailer, which is down by more than 23 per cent since it first listed on the ASX.

COVID-19 retail restrictions were not kind to the business, which has more than 250 stores across Australia and New Zealand. Conditions were still choppy even when lockdowns lifted, and the company reported in February it was experiencing “near term economic headwinds” and that online sales had dropped by close to 30 per cent.

There have been signs the brand is headed for a fashion facelift, however, as the company poached Erica Berchtold, the boss of online fashion marketplace The Iconic, to join Best & Less as chief executive from September.

Erica Berchtold will leave The Iconic in September to become chief executive at Best & Less.Credit: Fairfax Media

Best & Less said on Monday the takeover bid would not affect Berchtold’s appointment.

When her appointment was announced last month, Berchtold pointed to the importance of the brand to her own family and flagged the opportunity to make a deeper connection with customers.

“[Best and Less Group’s] brands are synonymous with quality and value and having a close affinity with Mum and her family,” she said.

“As a mother of three young children myself, I can personally attest to that and I look forward to deepening that relationship further to move us closer to our goal of being the No.1 choice for mums.”

Blundy already owns close to 16.5 per cent of Best & Less and is the company’s non-executive director.

Blundy has also recently taken a shine to other struggling listed retailers, snapping up a 7.4 per cent stake in plus-size women’s clothing retailer City Chic, which had been sold down heavily due to poor performance.

Retail experts said the bid for Best & Less was a testament to the strong brand equity it offers, having been in operation since 1965, but there was space to refresh it to target new shoppers.

The Retail Doctor Group chief executive Brian Walker said there was an opportunity to turn Best & Less into a stronger omnichannel offer, with a refreshed online presence and smaller bricks and mortar footprint.

“The company’s future in metro shopping centres with the big rents, I think, is doubtful,” he said.

There was also scope to rethink the brand so it appealed more to younger consumers, he said.

“It is largely a Baby Boomers’ brand ... with the next millennial generation of young mums, it doesn’t have the same cache,” Walker said.

Best & Less shares declined on Monday, slipping more than 3 per cent and closed at $1.95.

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