Edinburgh Woollen Mill failure means £50m black hole for unsecured creditors
Creditors of the failed fashion chain Edinburgh Woollen Mill (EWM) were owed more than £50m when the business went into administration on 5 November, new documents have revealed.
An administrator’s proposal for The Edinburgh Woollen Mill Limited, filed by FRP Advisory on 29 December, shows unsecured creditors include suppliers, HMRC, landlords, and a defined benefit pension scheme, inews reported.
The pension scheme represents the largest portion of unsecured creditors, with EWM owing £17.5m. Suppliers were owed £11.4m, including over £1.5m to suppliers in Bangladesh and Sri Lanka. Meanwhile, HM Revenue and Customs is owed £10.5m and landlords, including Colliers International, are owed £9.3m.
The retail chain also owed £140m to its parent company The Edinburgh Woollen Mill Group. The company is listed as a secured creditor, meaning it has higher priority than unsecured creditors. However, FRP said in the proposal that EWM Group was unlikely to receive the full amount it is owed.
Administrators at FRP had continued to trade the business in the run-up to Christmas, but all the group’s stores are now closed under the latest UK-wide Covid-19 restrictions.
Some retail units were shuttered in early November when administrators were appointed, resulting in 860 job losses. Another 2,000 jobs are at risk if a buyer can't be found.
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