// 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 Peaco*cks remains in administration
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.
READ MORE:
- Philip Day strikes new deal to save Edinburgh Woollen Mill brands
- M&S rescues Jaeger from administration but stores set to close
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 Peaco*cks 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.
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As an expert in business and retail, it's evident from the provided article that the Edinburgh Woollen Mill (EWM) Group, along with its affiliated brands Ponden Home and Bonmarche, faced a challenging situation, leading to their administration. The recent rescue deal orchestrated by Purepay Retail, a consortium led by Steve Simpson, the existing COO of EWM Group, has played a crucial role in saving a significant number of jobs and stores.
Let's break down the key concepts in the article:
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Edinburgh Woollen Mill (EWM) Group:
- The retail empire owned by Philip Day, the owner of Edinburgh Woollen Mill.
- Entered administration in late 2020, facing challenges exacerbated by the COVID-19 pandemic and changing shopping habits.
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Purepay Retail:
- A consortium of investors led by Steve Simpson, the COO of EWM Group.
- Orchestrated a rescue deal to save EWM, Ponden Home, and Bonmarche from disappearing.
- Will operate under license for both brands, aiming to continue trading and maintain jobs.
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Rescue Deal Details:
- Purepay Retail's deal with administrators FRP Advisory saved 246 stores, securing the future for 1453 workers across EWM and Ponden Home.
- 85 Edinburgh Woollen Mill and 34 Ponden Home stores will permanently close, resulting in around 500 job redundancies.
- Bonmarché, another retailer owned by Philip Day, was also acquired by Purepay Retail, ensuring the future of 72 stores and transferring 387 store staff, along with head office and distribution center staff.
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Remaining Brands:
- Peaco*cks, another brand under EWM Group, remains in administration.
- Jaeger, previously part of EWM Group, was acquired by Marks & Spencer, but the stores were not included in the deal, leading to no job savings.
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Philip Day's Role:
- Philip Day, a major secured creditor when EWM Group entered administration, played a significant role in the rescue deal.
- Surrendered his secured creditor position as part of the deal with Purepay Retail.
- Lined up international investors to provide the necessary cash for the brands to continue trading.
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Industry Challenges:
- The COVID-19 pandemic and changing shopping habits have impacted the high street, leading to a string of retailers, including Cath Kidston, Laura Ashley, Debenhams, Arcadia Group, and Oasis & Warehouse, entering administration in the previous year.
In conclusion, the rescue deal orchestrated by Purepay Retail has salvaged a substantial number of jobs and stores for EWM, Ponden Home, and Bonmarche. However, challenges remain for the retail industry, and the article highlights the complexities and uncertainties associated with navigating through such crises.
