Around 24,000 jobs at risk as high street fashion chain teeters on brink
- Credit: Archant
Town high streets have been dealt another potential blow after fashion chain Edinburgh Woollen Mill (EWM) – which owns Peacocks and Jaeger – lodged a notice of intention to appoint administrators.
Documents field with the High Court indicate the retailer – owned by businessman Philip Day – is close to collapse, with 24,000 jobs in the balance.
Bosses have written to staff warning that the national and local lockdowns had hit sales very heavily.
Potential buyers are likely to be sought to shore up the struggling business.
MORE – Port haulage operator set to expand after taking on container businessEWM said it has been hit hard by allegations – which it denies – that it and several rivals failed to pay some Bangladeshi suppliers during lockdown to try to cut costs for clothes they were unlikely to sell.
The move will see insolvency specialists at FRP spend 10 days carrying out an urgent review ahead of further action.
The company said all stores will continue trading and further details will be announced in due course but significant changes are expected.
EWM chief executive Steve Simpson said: “Like every retailer, we have found the past seven months extremely difficult.
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“This situation has grown worse in recent weeks as we have had to deal with a series of false rumours about our payments and trading which have impacted our credit insurance.
“Traditionally, EWM has always traded with strong cash reserves and a conservative balance sheet, but these stories, the reduction in credit insurance, against the backdrop of the lockdown and now this second wave of Covid-19, and all the local lockdowns, have made normal trading impossible.
“As directors we have a duty to the business, our staff, our customers and our creditors to find the very best solution in this brutal environment.
“So we have applied to court today for a short breathing space to assess our options before moving to appoint administrators.
“Through this process I hope and believe we will be able to secure the best future for our businesses, but there will inevitably be significant cuts and closures as we work our way through this.
“I would like to thank all our staff for their amazing efforts during this time and also our customers who have remained so loyal and committed to our brands.”
An FRP spokesman said: “Our team is working with the directors of a number of the Edinburgh Woollen Mill Group subsidiaries to explore all options for the future of its retail brands Edinburgh Woollen Mill, Jaeger, Ponden Home, and Peacocks.”
Chancellor Rishi Sunak is expected to unveil new plans for protecting jobs and businesses hit by the second wave and new measures.