A fashion chain with shops in Tayside and Fife is to be saved from liquidation.
The owner of Edinburgh Woollen Mill has secured a deal to rescue the brand and its sister business Ponden Homes from disappearing for good after it crashed into administration last year.
Administrators at FRP confirmed 246 stores will be saved by Purepay Retail, which is controlled by former owner Philip Day. The deal secures the future for 1,453 workers.
The new owner will operate under licence across both brands, saving 1,347 shop workers, 72 employees at head office and a further 34 jobs at the company’s Carlisle distribution centre.
Shops under threat in Tayside and Fife
However, 85 Edinburgh Woollen Mill and 34 Ponden Home stores have been permanently closed as part of the agreement.
Another sister brand to EWM, fashion chain Peacocks, remains in administration.
There are Edinburgh Woollen Mill branches in Dundee, St Andrews, Blairgowrie, Pitlochry, Arbroath, Perth, Dunfermline and Brechin.
The Courier revealed last year that the fashion chain would leave Dundee as soon as a new tenant was found for the Commercial Street site.
There are Peacocks branches in Arbroath and Leven. The chain’s Forfar branch closed suddenly last month.
Jobs at risk
Tony Wright, joint administrator and partner at FRP, said: “We have extensively marketed these businesses for sale and this transaction provides the best chance to save stores and jobs, but also meet our own statutory obligations to creditors.
“However, with such little visibility on future trading conditions in UK retail, we regret that not all of Edinburgh Woollen Mill 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.”
On Monday, Marks & Spencer signed a deal to take over Jaeger, another part of Mr Day’s business empire.
However, M&S did not buy the Jaeger stores, so no jobs are expected to be saved.
Previous owner behind new deal
Former owner Mr Day was a major secured creditor when EWM collapsed in November.
The Dubai-based businessman is behind the deal to rescue the retailer and lined up a series of international investors who will provide the cash it needs to continue trading.
It will see EWM continue to be controlled by Mr Day with new investors repaying him the money owed as a secured creditor.
Unsecured creditors including landlords and suppliers are unlikely to get back any money owed.
The deal will come too late for some staff too, with around one third of the 2,571 employees already made redundant.
Trouble on the High Street
Edinburgh Woollen Mill Group (EWM) became one of a string of retailers embarking on a major restructuring during the Covid-19 pandemic when it called in administrators in October.
The high street has faced a double blow since coronavirus restrictions added to the pressure already being exerted by changing shopping habits as customers turn to online retail.
Paperchase is set to enter administration.
Debenhams will shut all its stores by March at the latest unless a remarkable rescue deal is secured.
Sir Philip Green’s fashion empire Arcadia has also entered administration.
Its plus-size clothing brand Evans became the first in the stable to be bought out of retail giant’s administration process in December. But the deal will not include brick and mortar stores, just the online business.
Several companies are eyeing bids for Arcadia’s Topshop operation. The future of its Dorothy Perkins, Burton, Wallis and Miss Selfridge brands is less certain.
Oasis and Warehouse wound up its retail business in April, with the loss of 1,800 jobs.
Argos also announced its intention to shut all standalone shops.
Meanwhile companies such as Marks & Spencer and River Island have also cut staff.