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News | 12th November 2020
 

EWM collapses with 750 jobs lost

About 40 staff are made redundant as administrators take over

 
 
The former EWM headquarters at Waverley Mills, Langholm
 

SEVEN hundred and fifty jobs at Edinburgh Woollen Mill have been axed after the brand went into administration last Thursday.

Tony Wright and Alastair Massey, partners at specialist business advisory firm FRP, were appointed as joint administrators to The Edinburgh Woollen Mill Limited (t/a The Edinburgh Woollen Mill).

They were also appointed administrators of Duvetco Limited (t/a Ponden Home) where 116 roles are now redundant.

It is believed that about 40 jobs in Langholm alone have been lost.

Edinburgh Woollen Mill has 384 stores in the UK and 2,571 staff.

Ponden Home, which sells homeware, curtains, bedding and furniture, has 73 stores and 329 staff.

The administrators confirmed that 56 Edinburgh Woollen Mill stores have now permanently closed, along with eight Ponden Home shops.

Continue to trade

The remaining 328 Edinburgh Woollen Mill and 65 Ponden Home stores will continue to trade, while a buyer is sought.

A charge was registered against the group in March and August this year, which makes Day a secured lender. He is first in the queue of creditors to recover debts.

Both businesses were trading well before the COVID-19 pandemic.

Lockdown restrictions and low consumer confidence and footfall of core customer demographics, including senior shoppers and international tourists, had a significant impact on trading performance.

In recent weeks, before administration, 56 Edinburgh Woollen Mill stores and eight Ponden Home stores and concessions were permanently closed.

Mr Wright, said: “Recent months have proved extremely challenging for many retailers, even those trading well before the pandemic, including the teams at EWM and Ponden Home.

“The administrations will give some further protection while we continue our search for buyers to secure the long-term futures for both businesses.

“Regrettably, the impact of COVID-19 on the brands’ core customer base and tighter restrictions on trading mean that the current structure of the businesses is unsustainable and has resulted in redundancies.

“We are working with all affected members of staff to provide the appropriate support.”

EWM Group and its other subsidiaries, including Jaeger and Peacocks, are not part of the administration.

Trading conditions

A spokesperson for EWM Group said: “Over the past month we explored all possible options to save EWM and Ponden Home from going into administration but, unfortunately, the ongoing trading conditions caused by the pandemic and lockdowns proved too much.

“It is with a heavy heart we acknowledge there is no alternative but to place the businesses into administration.

“We will continue to do all we can to support FRP Advisory in trying to secure the best outcome possible for these businesses in these sad circumstances.”

“In the case of Peacocks and Jaeger we are speaking to a number of parties who are interested in either buying parts of the business or offering investment and those conversations are ongoing.

“We are pleased that the High Court agreed to extend the breathing space for those companies for another two weeks to give us more time to work on the details and further pursue these opportunities.”

Retail Gazette reported that Mike Ashley had reportedly expressed his anger after his company Frasers Group was excluded from the auction of three Edinburgh Woollen Mill Group brands.

Frasers Group, which owns Sports Direct, House of Fraser and Evans Cycles, expressed interest in Jaeger, Peacocks and EWM, part of Philip Day’s retail empire, which have been put up for sale.

Insolvency consultants at FRP Advisory, who have been looking for suitors to save some of the brands, “have been unhelpful throughout the process, either refusing to provide or providing very slowly the normal information a buyer would expect”, according to Frasers Group.

Edinburgh Woollen Mill Group responded that all bidders for Peacocks and Jaeger had had “access to the same information and ample opportunity to make an offer”.

Langholm Alliance

Nicol Nicolson, Langholm Alliance’s community enterprise manager, said: “The alliance extends its deepest sympathies to all local workers who have given years of loyal service to EWM.

“After the disappointing upheaval of relocation to Carlisle, they have been hit by an even crueller blow.

“Our community action plan outlines a clear commitment to create employment opportunities in the years ahead and encourages small enterprises to grow sustainably with all the support available to us.

“I’d encourage anybody concerned about employment prospects to contact me and I’ll do my utmost to connect those people with the expertise at hand.”

 
 
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