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News | 15th October 2020
 

Pandemic infects iconic retail brand

More unemployment as Day puts EWM Group in administration

 
 
 

THE Edinburgh Woollen Mill Group intends to close up to 200 EWM stores this month, it has been revealed.

Correspondence was received by the E&L Advertiser over the company’s intentions after the EWM Group filed a notice to appoint administrators, with 24,000 jobs at risk, last Friday.

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.”

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.”

The document added: “Failure to identify a suitable buyer and completion of a sale of the business and assets would likely lead to liquidation.”

The high street fashion chain was founded in Langholm but moved its headquarters from Langholm to Castle Street in Carlisle two years ago.

Bosses told staff last Friday that national and local lockdowns, brought in by the government because of the coronavirus pandemic, had hit sales hard.

A statement 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.

“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.

“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.”

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.” 

David Mundell, Dumfriesshire, Clydesdale and Tweeddale MP, said he was deeply disappointed and his thoughts were with staff and their families.

He said: “Although the company controversially moved its head office from Langholm to Carlisle, a significant number of my constituents remain employed by EWM.

“It’s important all appropriate agencies, including South of Scotland Enterprise, work together to support those affected and every effort is made to save as many jobs as possible.”

Oliver Mundell, Dumfriesshire MSP, expressed sadness that such a well-known company, with roots in Langholm and sites at Moffat, Gretna Gateway and Carlisle, faced such a crisis.

He said:  “EWM has been a familiar brand for a long time and I hope some kind of rescue can be achieved in the days and weeks ahead.

“I stand ready to help constituents affected by this unwelcome news and will keep in touch with the relevant agencies.”

 
 
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