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The High Street fashion empire, the Edinburgh Woolen Mill Group, on the brink of collapse, has emerged.
The firm, which also owns the Peacocks and Jaeger brands, filed a notice to appoint managers on Friday, affecting about 24,000 employees.
Steve Simpson, chief executive of the EWM group, said the past seven months have been “extremely difficult” as he warned that normal trading will be “impossible” in the wake of a second coronavirus outbreak.
He said the closures will be “inevitable” as the brand fights for its survival.
It comes amid allegations that the company canceled millions of pounds worth of orders with garment factories in Bangladesh at the start of the crisis, with workers claiming the EWN demanded steep discounts, resulting in the workers being laid off.
“Like all retailers, we have found the last seven months extremely difficult,” he said.
“This situation has worsened in recent weeks as we have had to deal with a series of false rumors about our payments and operations that have impacted our credit insurance.
(Image: Getty)
“Traditionally, the group has always operated with strong cash reserves and a conservative balance sheet, but these stories, the reduction in credit insurance, in the context of the lockdown, and now this second wave of Covid-19 and all the lockdowns locals have made normal trading impossible.
“As directors, we have a duty to the company, our staff, our clients and our creditors to find the best solution in this brutal environment.
“So today we have asked the court for a brief reprieve to evaluate our options before moving on to appoint administrators.”
All stores will continue to be listed and more details will be announced in due course, the company added, however Simpson warned the move will “inevitably” result in job cuts and closures.
“Through this process, I hope and believe that we will be able to secure the best future for our businesses, but there will inevitably be significant cuts and closures as we move through this,” he said.
A FRP spokesperson added: “Our team is working with the directors of various Edinburgh Woolen Mill Group subsidiaries to explore all options for the future of their Edinburgh Woolen Mill, Jaeger, Ponden Home and Peacocks retail brands.”
The move comes as Chancellor Rishi Sunak is expected to unveil new plans to protect jobs and businesses affected by the second wave and new measures.
(Image: Staffordshire Bulletin)
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The Edinburgh Woolen Mill Group, which is based in Langholm, Scotland, is owned by billionaire Philip Day, the businessman who rivaled Mike Ashley in the acquisition of Jack Wills last year.
His empire, which also owns Jacques Vert, Jaeger, Eastex, Austin Read and Windsmoor, acquired Peacocks in 2012, saving 388 stores, after the chain collapsed in administration.
Peacock was first founded in Warrington, Cheshire, in 1884 when Albert Frank Peacock founded Peacock’s Penny Bazaar.
He moved to Cardiff in 1940.
In 2017, EWG also took over premium retailer Jaeger, after it went into management.
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