Edinburgh Woollen Mill: 24,000 jobs in danger as firm appoints directors

EWM Group, owned by retail entrepreneur Philip Day, stated in an announcement that it plans to nominate directors to restructure the corporate, which additionally owns the Peacocks and Jaeger clothes manufacturers. It’s contemplating promoting components of the group, which employs 24,000 folks.

“We now have utilized to court docket as we speak for a brief respiration area to evaluate our choices earlier than shifting to nominate directors,” stated CEO Steve Simpson. “There’ll inevitably be important cuts and closures as we work our method by this,” he added.

British firms dealing with insolvency can appoint directors to supply safety towards collectors. Nevertheless it means handing over management to the directors, and the method can result in the enterprise being closed down.

EWM is the most recent UK retailer to embark on a significant restructuring, because the pandemic crushes clothes gross sales and accelerates a shift to e-commerce that was already hurting bodily shops. Marks & Spencer (MAKSY), TM Lewin, Harrods, Topshop proprietor Arcadia and Walgreens (WBA)-owned pharmacy chain Boots have introduced as much as 12,800 layoffs between them. Even Selfridges has been compelled to retrench, asserting 450 job cuts in July.

These cuts have been introduced earlier than native lockdowns and a second wave of coronavirus hit Britain’s malls and most important streets, highlighting the unsure prospects that retail employees face.

A closed branch of The Edinburgh Woollen Mill in Edinburgh on October 9.
Information printed Friday confirmed that Britain’s financial restoration was stalling even earlier than the contemporary surge in infections. UK GDP grew by 2.1% in August, lower than half the speed economists have been anticipating. Finance Minister Rishi Sunak unveiled additional support for firms affected by the brand new coronavirus restrictions on Friday.

Edinburgh Woollen Mill is in a very robust place as a result of lots of its shops are within the north of Britain, the place restrictions have been tightened greater than elsewhere. Its clients additionally are usually older, in keeping with Patrick O’Brien, head of UK retail analysis at GlobalData.

“Any retailer targeted on getting older consumers into bodily shops goes to battle to outlive,” O’Brien said on Twitter on Friday.

EWM Group stated it is usually having to cope with “false rumors” regarding its enterprise practices, which it stated have impacted its credit score insurance coverage agreements and damage its funds. The corporate has been accused by suppliers in Bangladesh of not paying for items, in keeping with UK media studies. It denies the claims.

“The discount in credit score insurance coverage, towards the backdrop of the preliminary lockdown, present native lockdowns, and the second wave of Covid-19 lowering footfall have made regular buying and selling unimaginable,” Simpson stated.

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