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News | 14th January 2021
 

EWM is sold but not all jobs will be saved

 
 
The former EWM headquarters at Waverley Mills, Langholm
 

CRITICISM has been levelled at the way Tuesday’s sale of high street retailer Edinburgh Woollen Mill has been processed.

The deal was hailed as having saved hundreds of jobs at EWM and Ponden Home, which have been in administration since November 5.

They were formerly owned by billionaire Philip Day, the sole owner of Edinburgh Woollen Mill Group.

The joint administrators announced that the businesses were sold to Purepay Retail Limited, which was backed by an international investor consortium.

Tony Wright and Alastair Massey, partners at specialist business advisory firm FRP, have marketed the two businesses for sale.

Purepay, a secured creditor to the businesses, has acquired all the remaining stock, along with the head office site and distribution centre in Carlisle.

The administrator said Purepay would operate 246 stores under licence from both brands.

The corresponding 1,347 store staff will transfer to the acquirer, alongside all 72 head office and 34 distribution staff.

The remaining 85 EWM stores and 34 Ponden Home stores have been permanently closed.

The roles from these stores, including 358 EWM staff and 127 Ponden Home staff, have been made redundant.

Mr Wright said: “We have extensively marketed these businesses and this transaction gives the best chance to save stores and jobs and meets our own statutory obligations to creditors.

“With such little visibility on future trading conditions in UK retail, we regret that not all EWM 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.”

Jaeger Retail Limited and Peacocks Stores Limited remain in administration.

David Stevenson, founder of EWM and chairman of Ashleybank Investments, represents one of the creditors of the EWM administration.

He said: “Steve Simpson, Philip Day’s right-hand man and now the ‘new owner of EWM’ was in touch with us yesterday to tell us how delighted he was to have secured a future for the business and, working with Philip Day, he had agreed terms for the purchase.

“He didn’t say what they were.

“I was then surprised to be told that he had committed to acquire only the online part of the business and not taken responsibility for the stores.

“One hundred and fifty stores have already been closed and this process of closing stores will continue during the current lockdown so exactly what the final outcome will be is very muddy indeed.

“It’s certainly a very different picture to the one painted in the press releases.

“I’m afraid I’m more than cynical about the way this process has been engineered and the outcome looks very similar to the one I forecast when administrators were appointed.

“The unsecured creditors, of which there are hundreds, have been hung out to dry and will receive tuppence in the pound, while the shareholders will come out a lot, lot better.

“To cap it all, the new owner asks us “to support him going forward to create a more positive future of both of us”.  He must be joking!”

The EWM Group is selling Jaeger to Marks & Spencer.

Richard Price, managing director of M&S Clothing & Home, said: “We have set out our plans to sell complementary third-party brands as part of our Never the Same Again programme to accelerate our transformation and turbocharge online growth.

“In line with this, we have bought the Jaeger brand and are in the final stages of agreeing the purchase of product and supporting marketing assets from the administrators of Jaeger Retail Limited.

“We expect to fully complete later this month.”

Dumfriesshire MP David Mundell and MSP Oliver Mundell have cautiously welcomed the deal which may secure some EWM jobs and branches.

They said: “This appears to be a complex agreement which we firmly hope will bring some certainty for those employed by EWM on both sides of the border.

“We will seek clarification about the future of EWM’s remaining retail sites in Dumfriesshire and historical assets such as the long-boarded-up former Moffat Mercury Inn.”

 
 
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