Edinburgh Woollen Mill rescued in deal saving 1,500 jobs
Administrators at FRP confirmed that 246 stores will be saved by Purepay Retail, which is controlled by former owner Philip Day. However, 85 Edinburgh Woollen Mill and 34 Ponden Home stores have been permanently closed as part of the agreement.
The new owner will operate under licence across both brands, saving 1,347 shop workers, 72 employees at head office, and a further 34 jobs at the company's Carlisle distribution centre. Fashion chain Peacocks, another sister brand to EWM, remains in administration.
Tony Wright, joint administrator and partner at FRP, said: "We have extensively marketed these businesses for sale and this transaction provides the best chance to save stores and jobs, but also meet our own statutory obligations to creditors.
"However, with such little visibility on future trading conditions in UK retail, we regret that not all of Edinburgh Woollen Mill and Ponden Home could be rescued. This has resulted in a significant number of redundancies at a particularly challenging time of year and period of economic uncertainty.
"We have a team working hard to support all those affected as we help make applications for redundancy payments."
Former owner Mr Day was a major secured creditor when EWM collapsed in November. The Dubai-based businessman is behind the deal to rescue the retailer and lined up a series of international investors who will provide the cash it needs to continue trading.
It will see EWM continue to be controlled by Mr Day with new investors repaying him the money owed as a secured creditor. Unsecured creditors including landlords and suppliers are unlikely to get back any money owed. The deal will come too late for some staff too, with around one third of the 2,571 employees already made redundant.
Edinburgh Woollen Mill Group became one of a string of retailers embarking on a major restructuring during the Covid-19 pandemic when it called in administrators in October. It collapsed with £51.6 million of unsecured debt, including £17.5m owed to its pension scheme and £10.6m of unpaid tax. As of March 2019, it had £72.5m in cash, which had fallen to £12.5m when it collapsed.
The Edinburgh Woollen Mill was founded by Drew Stevenson in 1946 as the Langholm Dyeing and Finishing Company, dyeing yarn, and the move into retailing began in 1970, when the group opened its first shop in Randolph Place, Edinburgh
The high street has faced a double blow since coronavirus restrictions added to the pressure already being exerted by changing shopping habits as customers turn to online retail.
Cath Kidston, Laura Ashley and Oasis were among the retailers that entered administration last year. On Monday, Marks & Spencer signed a deal to take over Jaeger, another part of Mr Day's business empire which also entered administration last year. However, M&S did not buy the Jaeger stores, so no jobs are expected to be saved.
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