American hedge fund Davidson Kempner eyes Peacocks investment

Peacocks Edinburgh Woollen Mill

Davidson Kempner, the American hedge fund, is reported to be interested in an investment deal for value fashion chain Peacocks.

It emerged last week that an unnamed American investor was interested in the value chain, part of the Edinburgh Woollen Mill group, which filed notice of its intention to appoint an administrator at the end of last week.

EWM said last week that claims, which turned out to be incorrect, from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) that the group owed around £27m to suppliers in the country jeopardised the investment in Peacocks.

BGMEA retracted the claims conceding that most of the bills, which related to cancelled orders due to the COVID pandemic, had been agreed or paid in full.

Today Davidson Kemper, which his one of the world’s largest hedge funds, has been named as that investor by The Times and is said to be interested in buying a 25% stake in the retailer.

EWM recently confirmed it was carrying out a valuation process for Peacocks, which it acquired out of administration in 2012. The move followed unsolicited approaches received for its heritage fashion brands, which include Jaeger and Austin Reed (acquired in 2017 and 2016 respectively).

On Friday it was revealed that the EWM Group had filed notice at the High Court of its intention to appoint an administrator to give the business breathing space to find investors and potential buyers.

In a communication to staff, chief executive Steve Simpson said: “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.”

The group was hit hard by the lockdown of non-essential retail as a result of the COVID-19 and the lacklustre footfall since restrictions were eased. While its chains have little city centre exposure, where footfall has been hit the worst, its more mature customer base has proved the most likely to stay at home and avoid shopping during the crisis.