Collapsed retail giant Edinburgh Woollen Mill has been saved in a deal that will protect 1,500 jobs and 250 stores.
Philip Day’s Jaeger will be taken over by Marks & Spencer in a separate agreement as the deal between the retail tycoon and Middle Eastern investors is set to be finalised.
Retailers Edinburgh Woollen Mill, Ponden Homes and Bonmarche, owned by the businessman’s EWM group, will be sold to a consortium of international investors, according to The Telegraph.
Administrators at FRP confirmed 246 stores will be saved by Purepay Retail, which is controlled by former owner Day. The deal secures the future for 1,453 workers.
M&S look set to rescue historic Jaeger fashion brand, which fell into administration in November but has enjoyed many a celebrity fan including Audrey Hepburn, Twiggy and Kate Middleton (Duchess of Cambridge pictured in 2012 wearing Jaeger)
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.
From dyeing yarn to fashion: The EWM story
Edinburgh Woollen Mill was first founded in 1946 by Drew Stevenson as the Langholm Dyeing and Finishing Company and chiefly dyed yarn.
By 1970, when it opened its first shop Edinburgh, then two years later opened another across the border in Carlisle.
It was taken over by a management buy-in led by Philip Day and is now an independent privately-owned business 100% held by his family.
It acquired the Jaeger brand in 2017 and Peacocks came earlier in 2012 when it was taken in after going into administration.
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.
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.’
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.
The closing down sale for The Edinburgh Woollen Mill store in Kingston-Upon-Thames
Edinburgh Woollen Mill is owned by businessman Philip Day, who has a fortune of £1.05billion
Edinburgh Woollen Mill Group became one of a string of retailers embarking on a major restructuring during the Covid-19 pandemic when it called in administrators in October.
Dubai-based businessman Philip Day’s £1billion empire
Philip Day, 55, worked at his parents’ newsagents shop as a teenager before going on to make millions as a retail tycoon.
Day started his career at clothing manufacturers Coats Viyella and Wensum. He was headhunted by Aquascutum at the age of 28 where he stayed for five years, working up to Joint Managing Director.
In 2001, he joined Edinburgh Woollen Mill, where he led a buyout of the company backed by a private equity firm. The next year he acquired the company for £67.5 million with the backing of Bank of Scotland.
At the time, the company employed 3,140 people.
He has since built on the empire by buying struggling retailers from administrators – including Austin Reed, Country Casuals, Jane Norman and Peacocks.
As of 2017, British-born Day lives in Dubai, and ‘spends fewer than 10 days a year in the UK’.
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.
Cath Kidston, Laura Ashley and Oasis were among the retailers that entered administration last year.
On Monday, Marks & Spencer signed a deal to take over Jaeger, another part of Mr Day’s business empire which also entered administration last year. However, M&S did not buy the Jaeger stores, so no jobs are expected to be saved.
In November high street chains Edinburgh Woollen Mill and Ponden Home collapsed into administration with 866 jobs axed.
A total of 64 stores – 56 Edinburgh Woollen Mill and eight Ponden Home – permanently closed.
The remaining 328 EWM and 65 Ponden Home stores continued to trade, Covid-19 restrictions permitting, whilst a buyer was sought.
Sources close to the process said they believed a buyer was unlikely to be found and a total of 2,571 staff faced losing their jobs.
Mr Wright said: ‘Recent months have proven extremely challenging for many retailers, even those that were trading well before the pandemic, including the teams at Edinburgh Woollen Mill and Ponden Home.
‘The administrations will provide 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.’
The high street giant looks set to re-invent the brand as part of its third-party offering alongside brands including Ghost
High street giant Marks & Spencer bought upmarket fashion brand Jaeger following its collapse last autumn.
The retail bellwether is expected to buy the intellectual property only, allowing M&S to sell Jaeger-branded goods on its website as a third-party brand.
M&S did not disclose the amount paid but it is understood to be around £5 million.
The deal means no store staff from Jaeger are expected to keep their jobs and all physical sites – closed due to lockdown restrictions – are expected to stay shut permanently.
How more than 210,000 job losses have been revealed by major UK firms since lockdown began
Some 210,781 job losses have been announced by major British employers since the start of the coronavirus lockdown in March as follows:
- October 7 – Greene King – 800
- October 6 – Virgin Money – 400
- October 6 – Vp – 150
- October 5 – Cineworld – 5,500 (many cuts likely to be temporary)
- September 30 – TSB – 900
- September 30 – Shell – 9,000 worldwide
- September 29 – Ferguson – 1,200
- September 22 – Wetherspoon – 400 to 450
- September 22 – Whitbread – 6,000
- September 18 – Investec – 210
- September 15 – Waitrose – 124
- September 14 – London City Airport – 239
- September 9 – Lloyds Bank – 865
- September 9 – Pizza Hut – 450
- September 4 – Virgin Atlantic – 1,150
- September 3 – Costa – 1,650
- August 27 – Pret a Manger – 2,800 (includes 1,000 announced on July 6)
- August 26 – Gatwick Airport – 600
- August 25 – Co-operative Bank – 350
- August 20 – Alexander Dennis – 650
- August 18 – Bombardier – 95
- August 18 – Marks & Spencer – 7,000
- August 14 – Yo! Sushi – 250
- August 14 – River Island – 350
- August 12 – NatWest – 550
- August 11 – InterContinental Hotels – 650 worldwide
- August 11 – Debenhams – 2,500
- August 7 – Evening Standard – 115
- August 6 – Travelex – 1,300
- August 6 – Wetherspoons – 110 to 130
- August 5 – M&Co – 380
- August 5 – Arsenal FC – 55
- August 5 – WH Smith – 1,500
- August 4 – Dixons Carphone – 800
- August 4 – Pizza Express – 1,100 at risk
- August 3 – Hays Travel – up to 878
- August 3 – DW Sports – 1,700 at risk
- July 31 – Byron – 651
- July 30 – Pendragon – 1,800
- July 29 – Waterstones – unknown number of head office roles
- July 28 – Selfridges – 450
- July 27 – Oak Furnitureland – 163 at risk
- July 23 – Dyson – 600 in UK, 300 overseas
- July 22 – Mears – fewer than 200
- July 20 – Marks & Spencer – 950 at risk
- July 17 – Azzurri Group (owns Zizzi and Ask Italian) – up to 1,200
- July 16 – Genting – 1,642 at risk
- July 16 – Burberry – 150 in UK, 350 overseas
- July 15 – Banks Mining – 250 at risk
- July 15 – Buzz Bingo – 573 at risk
- July 14 – Vertu – 345 July 14 – DFS – up to 200 at risk
- July 9 – General Electric – 369
- July 9 – Eurostar – unknown number
- July 9 – Boots – 4,000
- July 9 – John Lewis – 1,300 at risk
- July 9 – Burger King – 1,600 at risk
- July 7 – Reach (owns Daily Mirror and Daily Express newspapers) – 550
- July 6 – Pret a Manger – 1,000 at risk
- July 2 – Casual Dining Group (owns Bella Italia and Cafe Rouge) – 1,909
- July 1 – SSP (owns Upper Crust) – 5,000 at risk
- July 1 – Arcadia (owns TopShop) – 500
- July 1 – Harrods – 700
- July 1 – Virgin Money – 300
- June 30 – Airbus – 1,700
- June 30 – TM Lewin – 600
- June 30 – Smiths Group – ‘some job losses’
- June 25 – Royal Mail – 2,000
- June 24 – Jet2 – 102
- June 24 – Swissport – 4,556
- June 24 – Crest Nicholson – 130
- June 23 – Shoe Zone – unknown number of jobs in head office
- June 19 – Aer Lingus – 500
- June 17 – HSBC – unknown number of jobs in UK, 35,000 worldwide
- June 15 – Jaguar Land Rover – 1,100
- June 15 – Travis Perkins – 2,500
- June 12 – Le Pain Quotidien – 200
- June 11 – Heathrow – at least 500
- June 11 – Bombardier – 600
- June 11 – Johnson Matthey – 2,500
- June 11 – Centrica – 5,000
- June 10 – Quiz – 93
- June 10 – The Restaurant Group (owns Frankie and Benny’s) – 3,000
- June 10 – Monsoon Accessorise – 545
- June 10 – Everest Windows – 188
- June 8 – BP – 10,000 worldwide
- June 8 – Mulberry – 375
- June 5 – Victoria’s Secret – 800 at risk
- June 5 – Bentley – 1,000
- June 4 – Aston Martin – 500
- June 4 – Lookers – 1,500
- May 29 – Belfast International Airport – 45
- May 28 – Debenhams (in second announcement) – ‘hundreds’ of jobs
- May 28 – EasyJet – 4,500 worldwide
- May 26 – McLaren – 1,200
- May 22 – Carluccio’s – 1,000
- May 21 – Clarks – 900
- May 20 – Rolls-Royce – 9,000
- May 20 – Bovis Homes – unknown number
- May 19 – Ovo Energy – 2,600
- May 19 – Antler – 164
- May 15 – JCB – 950 at risk
- May 13 – Tui – 8,000 worldwide
- May 12 – Carnival UK (owns P&O Cruises and Cunard) – 450
- May 11 – P&O Ferries – 1,100 worldwide
- May 5 – Virgin Atlantic – 3,150
- May 1 – Ryanair – 3,000 worldwide
- April 30 – Oasis Warehouse – 1,800
- April 29 – WPP – unknown number
- April 28 – British Airways – 12,000
- April 23 – Safran Seats – 400
- April 23 – Meggitt – 1,800 worldwide
- April 21 – Cath Kidston – 900
- April 17 – Debenhams – 422
- March 31 – Laura Ashley – 268
- March 30 – BrightHouse – 2,400 at risk
- March 27 – Chiquito – 1,500 at risk
