Edinburgh Woollen Mill wants more negotiation time for rescue plan
Edinburgh Woollen Mill wants to delay its rescue plan to save parts of the beleaguered UK business. The retail group is expected to apply for a 10-day extension of creditor protection as lockdowns in Wales, where it has its HQ and two distribution centres, are hampering negotiations. Currently around 21,500 jobs are at risk.
EWM filed notice to appoint administrators earlier this month, blaming wider Covid-19-related lockdowns for hurting sales. The debt-free business relies heavily on a core older demographic but that’s just the demographic that’s cautious about venturing out and has been advised to isolate at home to reduce the risk of infection.
Several reports on Thursday said the business will now go back to the High Court to ask for the extension, which could stave off a total collapse of the firm. But advisory firm FRP could still formally place the business into administration to protect creditors’ interests if it doesn’t see a realistic prospect of a buyer emerging.
The majority of EWM’s stores remain closed due to national restrictions. It has about 1,100 UK stores across banners including Peacocks, Jaeger and Austin Reed, and is controlled by retail magnet Philip Day. The business has already said that it will close 50 loss-making stores with the loss of 600 jobs. At least 100 more sites are earmarked for closure.
Day, who is a secured creditor to Edinburgh Woollen Mill, wants to buy back some of the business, including Peacocks. However, a pre-pack deal would rely on support from American fund Davidson Kempner. Day has already taken the re-pack administration route when he bought womenswear retailer Bonmarché. In January, he privatised the company, put it into administration, then bought it back after securing a some of its debt before it collapsed.
According to reports, the Jaeger and Austin Reed brands are being eyed by Torque Brands, which recently bought shirt maker/retailer TM Lewin, closing all its stores to make it an online-only brand.
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