Edinburgh Woollen Mill in race to find buyer with 24,000 jobs at risk
Up to 24,000 jobs are at risk after Carlisle-based retail chain Edinburgh Woollen Mill today filed a notice to appoint administrators.
The business said government-enforced national and local lockdowns, due to the coronavirus pandemic, were responsible for lower sales.
It was also the subject of allegations, which it denies, that it failed to pay Bangladeshi suppliers.
It operates more than 1,100 stores, including multiple locations throughout the North West.
Staff were told this morning that stores will continue trading for the time being while insolvency experts have 10 days to try and find a buyer for the business, which also owns high street brands Peacocks and Jaeger.
Edinburgh Woollen Mill (EWM) chief executive Steve Simpson said: “Like every retailer, we have found the past seven months extremely difficult.
“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.”
He added: “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.”
A spokesman for business advisory group FRP 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.”
Pippa Stephens, retail analyst at data and analytics company GlobalData, said lockdowns will have especially impacted the chain’s older customer profile: “The Edinburgh Woollen Mill group’s reliance on older customers will have exacerbated its struggles throughout the COVID-19 pandemic, as these shoppers remain the most cautious about returning to physical retail locations.
“Furthermore, while younger consumers have retained some desire to purchase fashion items, Edinburgh Woollen Mill’s shoppers will have fewer reasons to buy new clothing as many will continue to shield until the virus has been significantly supressed, making the retailer’s range largely redundant.”
She added: “Out of the group’s brands, Peacocks is likely to be the most desirable to potential buyers, as it is the largest fascia, with its UK clothing market share forecast to remain stable at 0.8% in 2020.
“Its value proposition will be appealing to consumers, since the UK’s ongoing recession and increasing unemployment rates will drive many shoppers to minimise their non-essential spending for the foreseeable future.
“In addition, its wide range of childrenswear will also be beneficial, as this has been the most resilient clothing sub-sector throughout the pandemic thanks to the need for frequent replacement purchases.
“However, Jaeger is less likely to attract bidders, due its premium price points and focus on formalwear, which is out of favour as consumers continue to work from home.
“The group’s core Edinburgh Woollen Mill brand will also lack appeal amongst potential buyers, as it has the greatest proportion of older shoppers.”
EWM is owned by Dubai-based tycoon Philip Day.
Born on a Stockport council estate, Mr Day turned down a place at university to start his career in clothing manufacturing.
In 2001, he joined Edinburgh Woollen Mill and led a buyout of the company.
He later bought home furnishing company Ponden Mill and soft furnishings company Rosebys, golfing brand ProQuip, women’s fashion retailer Jane Norman, outfitters Austin Reed and Country Casuals, and British fashion brand Jaeger.
He is estimated to be worth £1.05bn.