Jaeger and Peacocks owner Edinburgh Woollen Mill is on the brink of collapse putting 24,000 jobs at risk after sales were hit by lockdown
- Company owned by billionaire Phillip Day is under threat of collapsing
- It blamed the strict lockdown and new local measures for business drying up
- If it goes under it will be the biggest collapse of the pandemic so far
High street fashion chain Edinburgh Woollen Mill, which owns Peacocks and Jaeger, is close to collapse, with 24,000 jobs in the balance.
The company has lodged a notice of intention to appoint administrators to look for potential buyers to shore up the struggling business.
Bosses wrote to staff on Friday morning, warning them that the national and local lockdowns had hit sales very heavily.
If the company goes under and all the jobs are lost it will be Britain’s largest business casualty so far.
The unenviable record had previously been held by British Airways shedding 12,000 roles back in April.
The closing down sale for The Edinburgh Woollen Mill store in Kingston-Upon-Thames
EWM said it had been hit hard by allegations – which it has denied – that the retailer and several rivals failed to pay some Bangladeshi suppliers during lockdown in an attempt to cut costs for clothes they were unlikely to sell.
The move for the firm, owned by businessman Philip Day, will see insolvency specialists at FRP spend 10 days carrying out an urgent review ahead of further action.
All stores will continue trading and further details will be announced in due course, the company added, but significant changes are expected.
EWM chief executive Steve Simpson said: “Like every retailer, we have found the past seven months extremely difficult.
Edinburgh Woollen Mill is owned by businessman Philip Day, who has a fortune of £1.05billion
Jaeger is part of the Edinburgh Woollen Mill empire and is now under threat of closure
Peacocks – which was still advertising a 30% sale today – is also owned by the EWM company
“This situation has grown worse in recent weeks as we have had to deal with a series of false rumours about our payments and trading which have impacted our credit insurance.
“Traditionally, EWM has always traded with strong cash reserves and a conservative balance sheet, but these stories, the reduction in credit insurance, against the backdrop 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 business, our staff, our customers and our creditors to find the very best solution in this brutal environment.
“So we have applied to court today for a short breathing space to assess our options before moving to appoint administrators.
“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.
“I would like to thank all our staff for their amazing efforts during this time and also our customers who have remained so loyal and committed to our brands.”
An FRP spokesman said: “Our team is working with the directors of a number of the Edinburgh Woollen Mill Group subsidiaries to explore all options for the future of its retail brands Edinburgh Woollen Mill, Jaeger, Ponden Home, and Peacocks.”
The move came just hours before Chancellor Rishi Sunak was expected to unveil new plans for protecting jobs and businesses hit by the second wave and new measure