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Thousands of jobs are at risk at Edinburgh Woolen Mill Group after it filed a notice to appoint managers and warned of “significant cuts and closures.”
The high street fashion chain, which owns Peacocks and Jaeger, has 24,000 employees.
He has now filed a notice of intent to appoint managers to search for potential buyers while he tries to keep the business afloat.
Bosses told staff on Friday morning that national and local coronavirus lockdowns had hit sales hard.
Edinburgh Woolen Mill also owns Peacocks and Jaeger
The company also blamed allegations, which it denies, that it and several rivals failed to pay some Bangladeshi suppliers during the shutdown in an attempt to cut the cost of clothing they were unlikely to sell.
For now, EWM Group stores will continue to operate while insolvency specialists will spend 10 days preparing an urgent review before taking further action.
The action will be announced later.
EWM CEO Steve Simpson said: “Like all retailers, we have found the last seven months extremely difficult.
“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.
“Traditionally, EWM 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 local lockdowns , 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.
“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 cutbacks and shutdowns as we go through this.
“I would like to thank all of our staff for their incredible efforts during this time and also our customers who have remained so loyal and committed to our brands.”
A FRP spokesperson said: “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.”
