Edinburgh Woollen Mill has fallen into administration after a prolonged process to restructure the wider business owned by Philip Day.
Edinburgh Woollen Mill collapses into administration
FRP Advisory have been appointed as administrators to the Edinburgh Woollen Mill brand, as well as Day’s homeware retailer Ponden Home.
Jaeger and Peacocks are not part of the administration.
The collapse means the likely loss of 2,571 jobs across the brands 384 UK stores.
FRP Advisory has already confirmed that 750 staff at The Edinburgh Woollen Mill and 116 employees at Ponden Home would immediately be made redundant.
Both shops will stay open and continue to trade while a buyer is sought after. So far no buyers have come forward however, putting the remaining jobs at risk.
Administrators at FRP Advisory added: "Recent months have proven extremely challenging for many retailers, even those that were trading well before the pandemic, including the teams at Edinburgh Woollen Mill and Ponden Home. The administrations will provide some further protection while we continue our search for buyers to secure the long-term futures for both businesses."
"Regrettably, the impact of COVID-19 on the brands’ core customer base and tighter restrictions on trading mean that the current structure of the businesses is unsustainable and has resulted in redundancies. We are working with all affected members of staff to provide the appropriate support."
Separately, EWM Group has been granted a further two-week extension by the High Court to continue discussions with potential suitors for its other brands Peacocks and Jaeger.
The retailer said last month that it would go bust without filing for an intention to appoint administrators with the High Court, with 24,000 jobs in the balance.
It is understood there is interest in parts of the business but a further 100 to 150 stores across the group are being earmarked for closure while talks continue with landlords on reducing rents.
Discussions on the sale of the Peacocks brand were also hit by lockdown restrictions in Wales, with the company’s headquarters and distribution centre based in Cardiff.
A spokesman for EWM Group said: “Over the past month we explored all possible options to save Edinburgh Woollen Mill and Ponden Home from going into administration, but unfortunately the ongoing trading conditions caused by the pandemic and lockdowns proved too much.
“In the case of Peacocks and Jaeger we are speaking to a number of parties who are interested in either buying parts of the business or offering investment, and those conversations are ongoing.”
The company is reportedly in talks with the owner of shirt-maker TM Lewin – Torque Brands – to buy Jaeger and other parties, including Frasers Group, are said to be interested.
It is also reported to be trying to save Peacocks, with a capital injection from US hedge fund Davidson Kempner.