THE Edinburgh Woollen Mill Group intends to close more than 50 EWM stores in the next few days followed by another 100 to 150 in the next two weeks, it has been revealed.
Correspondence has been received by the E&L Advertiser over the company’s intentions.
The document says: “In anticipation of the company going into administration, the company and proposed administrators are reviewing the company’s lease portfolio.
“This is with a view to which stores, if any, may be retained and / or potentially transferred by the company, acting by the administrators, to any prospective purchaser of the business and assets of the company.
“A rationalisation plan has been formulated and will be implemented immediately.
“This will result in the closure of more than 50 stories within the next few days and it is anticipated that a further 100 to 150 stores will be closed during the next fortnight.”
It added: “The company’s directors will work closely with the proposed administrators to try to mitigate any loss to the company’s creditors.
“As part of this, they will explore the possibility of selling its business and assets after the administrators are appointed.”
It revealed there were several parties interested in exploring a potential acquisition, including the option of a company controlled by some of the existing directors.
The document added: “Failure to identify a suitable buyer and completion of a sale of the business and assets would likely lead to liquidation.”
News broke this morning that the Edinburgh Woollen Mill Group had filed a notice to appoint administrators, with 24,000 jobs at risk.
According to Sky News, the high street fashion chain, which was founded in Langholm and owns Peacocks and Jaeger, lodged a notice of intention to appoint administrators to look for potential buyers to help keep the business afloat.
The company’s headquarters moved from Langholm to Castle Street in Carlisle two years ago.
Bosses told staff this morning that national and local lockdowns, brought in by the government because of the coronavirus pandemic, had hit sales hard.
The company also blamed allegations, which it denied, that it and several rivals failed to pay some Bangladeshi suppliers during lockdown in an attempt to cut the cost of clothes they were unlikely to sell.
A statement issued by the company said: “EWM Group, owner of a number of Britain’s most iconic retail brands, including Edinburgh Woollen Mill, Peacocks and Jaeger, is responding to the harsh trading conditions caused by the impact of the COVID-19 pandemic and a recent reduction in its credit insurance by launching a review of its businesses in a drive to secure their future.
“The Group has filed a notice of intention to appoint administrators with the High Court today.
“This gives the business necessary breathing space while it assesses the various options available.
“In recent weeks EWM has received a number of expressions of interest for various parts of the group and these are being assessed, along with all other options.
“At the end of this process the Group will appoint FRP Advisory as administrators who will carry out the necessary restructuring of the wider business.”
Steve Simpson, chief executive of EWM, said: “Like every retailer, we have found the past seven months extremely difficult.
“This situation has grown worse in recent weeks. 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 and the reduction in credit insurance against the backdrop of the initial lockdown, current local lockdowns and the second wave of COVID-19 reducing footfall have made normal trading impossible.
“As directors, we have a duty to the business, staff, customers and creditors to find the very best solution in this brutal environment.
“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.”
Mr Simpson took aim at a trade organisation which claimed EWM had not paid its suppliers in Bangladesh.
Earlier this week EWM warned that a potential takeover of Peacocks had been threatened because of allegations circulated by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
BGMEA claimed EWM had £27m of unpaid bills with suppliers, claims which the group denies.
The E&L Advertiser has contacted a number of employees for their comments
“It’s bad news but there’s nothing we can do. It’s just the current situation.”
Another said: “My thoughts are that it was to be expected. I’m sure the Phoenix will rise from the ashes as has happened before.
“The despicable part of the entire situation is that there has been absolutely no duty of care to the employees, no communication since lockdown began, apart from an email saying the wage payment date was changing.
“No asking how everyone was coping etc. Disgraceful.”
A statement by the Langholm Alliance said: “The wider view of the alliance is that, given Langholm’s status as the traditional home of EWM and the number of local people, whose livelihoods remain dependent on the company, we await the outcome of the forthcoming review and sincerely hope the administrators and management find a swift solution which safeguards jobs.”
EWM operates an outlet and café in Jedburgh and Borders MP, John Lamont, said: “This is very concerning news and not only for Jedburgh.
“EWM is a big employer in the UK and owns several other retail brands such as Ponden Home and Jaeger.
“I understand the company has contacted its staff this morning, which I welcome. It is important that staff are always made aware of any information first.
“There have been a number of very difficult news stories about jobs in the Borders this year and it is disappointing to see another potential loss.
“I sincerely hope administrators are not needed but, if they are, I’ll make sure I contact them to ensure employees are receiving the support they need.”