Bidders circle fashion chain Phase Eight

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The fashion retailer Phase Eight has received a series of takeover bids in a further sign that corporate activity in the retail sector is on the rise.

Sources said "more than two" bidders had made offers for the high-street chain, which is thought to have traded robustly recently.

Phase Eight, which has 82 stores and 125 concessions, is the latest retailer to consider a sale. The floral fashion chain Cath Kidston, the arts and craft retailer Hobbycraft and the single-price specialist Poundland are also on the market.

Sources said Phase Eight – which was bought for £51.5m in 2007 – had not conducted a formal sale process, but had received unsolicited bids and that negotiations were fairly advanced.

Michael Rahamim, the chairman of Phase Eight, declined to comment on a potential sale of the retailer. He said: "The business is performing to our satisfaction and we are focused on improving the performance of our business."

Kaupthing Capital Partners (KCP), a buyout unit of the troubled Icelandic bank Kaupthing, is understood to have a 49 per cent shareholding in Phase Eight. But the stake has, in effect, been under the control of the accountancy firm Smith & Williamson since it was appointed administrator to KCP in October 2008.

For the year to 31 January 2009, Phase Eight delivered a 42 per cent rise in pre-tax profits to £4.44m, compared with £3.12m the year before, according to the latest accounts filed at Companies House. It increased its operating profit to £4.72m, on turnover up by 11 per cent to £59.2m, for the same period.

Phase Eight targets women aged 35 to 55 years old, but its core market is plus-45 years. In January 2007, it was acquired by a consortium that included senior executives from Jane Norman, the young fashion chain. Mr Rahamim, who was appointed chairman of the company in early 2009, is reported to have invested in the 2007 deal.

A Smith & Williamson spokesperson said: "Since their appointment, the administrators have received a number of expressions of interest in KCP's stake in Phase Eight but have not seriously contemplated a sale. Naturally, the administrators will need some form of exit in due course."