Edinburgh Woollen Mill Group (EWM) is in a race to secure a rescue deal for the fashion retail business that could see its namesake chain close altogether.
The group, which includes the Edinburgh Woollen Mill, Peacocks, Jacques Vert, Austin Reed and Jaeger brands, is reported to be negotiating a pre-pack administration that will save the Peacocks chain, which has 400 stores, along with Bonmarche, the value fashion brand that EWM owner Philip Day acquired last year.
It was revealed on Friday that 50 stores in the Edinburgh Woollen Mill and Peacocks chains had already been closed with the likelihood of around 100 to 150 more being shuttered. This move followed the filing at the High Court of a notice to appoint an administrator, with FRP Advisory primed to step in.
The group is said to be attempting to execute a pre-pack administration that would save the Peacocks chain, along with Bonmarche. A new company, with the backing of Day and US hedge fund Davidson Kempner, would be formed to carry out the purchase and would be headed by Edinburgh Woollen Mill CEO Steve Simpson.
Edinburgh Woollen Mill, which has 260 stores, could be closed completely since its target market of mature customers, who are reluctant to head out to the shops right now, and international tourists mean its future looks grim while the COVID-19 crisis continues.
Some weeks ago the group revealed that it had received unsolicited approaches for its heritage fashion brands, which include Jaeger, Austin Reed and Jacques Vert, with reports suggesting it is likely they will be sold. Unnamed Chinese suitors and Jaeger’s former owner, the retail entrepreneur Harold Tillman, are among those believed to be circling.
EWM’s plight comes as it has been revealed that a record number of stores have been closed in 2020 as a result of the COVID-19 pandemic. Across retail chains, some 11,000 stores were closed between January and August, according to PwC, and 5,000 opened, leaving a net 6,000 closed. This is double the rate of store closures when compared to last year.
EWM is understood to have until Thursday to secure its deal or it will be obliged to apply to the High Court for an extension to its notice to appoint an administrator. The company employs more than 20,000 staff and has said it is committed to saving as many jobs as possible. The future of its Ponden Home chain is not known.
Read our recent briefing on the background of the Edinburgh Woollen Mill story here.