- Edinburgh Woollen Mill, Ponden Homes & Bonmarche saved from collapse in deal to protect 1984 jobs
- However, 85 Edinburgh Woollen Mill & 34 Ponden Home stores will permanently close, affecting around 500 jobs
- EWM Group’s Jaeger was acquired by M&S earlier this week, but Peacocks remains in administration
By guest author Elias Jahshan from Retail Gazette.
The owner of Edinburgh Woollen Mill has secured a deal to rescue the brand and sister businesses Ponden Home and Bonmarche from disappearing for good after it crashed into administration last year.
Administrators at FRP Advisory confirmed 246 stores would be saved by Purepay Retail, a consortium of investors led by Steve Simpson – the existing chief operating officer of Edinburgh Woollen Mill (EWM) Group, the former retail empire owned by Philip Day.
The rescue deal secures the future for 1453 workers across Edinburgh Woollen Mill and Ponden Home.
Purepay Retail will operate under licence across both brands, saving 1347 shop workers, 72 employees at head office and a further 34 jobs at the company’s Carlisle distribution centre.
However, 85 Edinburgh Woollen Mill and 34 Ponden Home stores will permanently close as part of the agreement, and around 500 staff are set to be made redundant as a result.
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.”
Purepay has also acquired Bonmarché – another retailer once owned by Day – from administrators RSM, including its remaining stock and its head office site and distribution centre in Wakefield.
This will secure the future of 72 Bonmarche stores under licence and 387 store staff will transfer to the acquirer, alongside all 51 head office and 93 distribution centre staff.
The remaining 148 stores are currently closed in line with government legislation, and RSM is reviewing all options for these sites prior to the lifting of the government lockdown.
Meanwhile, EWM Group’s remaining fascia Peacocks remains in administration.
Jaeger, another retailer once part of EWM Group, was bought out of administration by Marks & Spencer earlier this week.
However, M&S did not buy the Jaeger stores, so no jobs are expected to be saved.
It’s understood that Day, who was a major secured creditor when EWM Group went into administration, has surrendered his secured creditor position as part of the rescue deal with Purepay Retail.
Day was reportedly behind the rescue deal for Edinburgh Woollen Mill, Ponden Home and Bonmarche and lined up a series of international investors who will provide the cash it needs to continue trading.
It will see the retailers continue to be controlled by 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.
EWM Group became one of a string of retailers embarking on a major restructuring during the Covid-19 pandemic when it called in administrators in late 2020.
The high street has faced a double blow since Covid restrictions added to the pressure already being exerted by changing shopping habits as customers turn to online retail.
Cath Kidston, Laura Ashley, Debenhams, Arcadia Group and Oasis & Warehouse were among the retailers that entered administration last year.