EWM Group could appoint administrators after tough seven months
UK-based EWM Group, which owns the Edinburgh Woollen Mills, Peacocks and Jaeger brands, among others, could be on the verge of appointing FRP Advisory as administrators as the Covid crisis continues to cut a swathe through previously healthy UK high street brands.
But while the company has said little so far, newspaper reports suggested talks are also ongoing about a rescue deal. Hedge fund Davidson Kempner Capital Management could potentially inject cash into the firm and take a stake in EWM’s Peacocks chain, The Mail on Sunday reported.
If the firm did file for administration, it’s unclear how many stores might close and how many jobs are at risk at the business that employs over 20,000 people.
"Like every retailer, we have found the past seven months extremely difficult," EWM chief executive officer Steve Simpson said.
The Times at the weekend suggested the company could start closing some stores in the next couple of weeks. It currently has around 1,100 stores.
It also said that in a letter send to landlords, CEO Simpson talked of several potential buyers being interested in the group, including a new entity controlled by existing directors.
Aside from the Davidson Kempner interest, retail billionaire Philip Day, who controls the firm, is also seen as being in a strong position to buy the viable parts of the business out of administration if an administration filing does happen.
And it’s clear that parts of it are very viable in normal circumstances. In the six months to March 2019, its pre-tax profits topped £30 million on sales close to £300 million. And the firm had no bank debt.
But the pandemic has created an unprecedented situation that puts the difficult retail environment of the past few years in the shade.
Enforced store closures and Covid-concerned consumers have turned many stores into expensive empty spaces with no likelihood of an upturn any time soon.
“We will do everything we can to secure the survival of our businesses and protect jobs wherever possible,” an EWM spokesman said.
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