Cumbrian retail tycoon Philip Day has lost his £5.7 million equity investment in womenswear fashion retailer Bonmarche.

Spectre Holdings Ltd – the Dubai-registered company owned entirely by Mr Day – saw its multi-million investment wiped out when Bonmarche bosses called in the administrators last week.

Spectre also owns the debt and provided Bonmarche with a working capital facility while it grappled with a cost saving strategy to keep the embattled retailer afloat amid the “economic headwinds impacting the whole of the retail sector”.

And while that may yet be recovered, the £5.73m stumped up by Mr Day will not even if someone buys out the business, in-Cumbria understands.

Spectre – which remains separate from the Edinburgh Woollen Mill empire for which billionaire Mr Day is best known – and other creditors will be hoping for a deal to be struck between administrators FRP Advisory and a buyer.

A spokesman for Spectre said: "We are disappointed with the result of our investment in Bonmarche, but our primary thought at this time is with the business' employees and families."

The administration casts doubt over the future of Bonmarche’s 2,887 staff and 318 stores, which includes outlets in Carlisle, Workington and Barrow.

Tony Wright, joint administrator and partner at FRP Advisory, has said there “is every sign that we can continue trading” while Bonmarche is marketed for sale and that “there will be interest to take on the business”.

On making the announcement, chief executive Helen Connolly admitted that its business model “simply does not work”.

While bosses had considered other options including a Company Voluntary Arrangement (CVA) and refinancing, they did not “believe these options will fundamentally change the core challenges facing the business”, she said, adding that the “protracted economic uncertainty caused by the drawn-out Brexit process” had also fuelled its demise.

Ms Connolly did, however, praise Spectre for its involvement in the past few months after it become the majority shareholder of the business.

“We would like to thank Spectre and their team of advisors for their advice, guidance and support over the last few months,” she said.

“We believe that if we had had an opportunity to work with the Spectre team closely at an earlier stage, another outcome would have been possible.”

The praise is something of a surprise following the initial reluctance by Bonmarche bosses to welcome Spectre’s advances.

The protracted offer process for the company started back in March, when Spectre acquired 52.4 per cent of the company, triggering a mandatory takeover bid and following a string of dire profits warnings during the 12 months.

Bonmarche bosses advised shareholders to resist Spectre’s original offer of 11.445p per share, saying it undervalued the company, and seemingly ignored Spectre’s demand for urgent action to undertake a store-by-store profitability assessment, a halt to dividends and restrict investment.

However, it made a dramatic u-turn in June following another profit warning, advising shareholders to go with Spectre’s offer – a move which saw remaining shareholders sell their stakes en masse.

Spectre completed the mandatory offer process in July, taking Bonmarche private the following month, when it finally had access to the retailer’s financials.

Despite the move and offer of support, Bonmarche acted on the warning of its auditors PwC – which had continually expressed concerns about the company’s ability to continue as a going concern at its current level of trading – and placed it into administration.

Spectre’s, and Mr Day’s, involvement in Bonmarche going forward remain unclear until a buyer is secured.

Mr Day – who has an estate in Brampton and was named the eighth richest person in the North West with a fortune of £1.2 billion in The Sunday Times Rich List earlier this year – has a long legacy of turning around struggling retailers.

And while he has added the likes of Peacocks, Austin Reed, and Jaeger to Edinburgh Woollen Mill Group – which moved its headquarters to Carlisle last year – Mr Day has also lost out to fellow retail mogul Mike Ashley in details for House of Fraser and men’s fashion chain Jack Wills.