However, the new owners have announced they will be closing 224 stores making 3,100 staff redundant.
Fashion retailer, Peacocks, has been the subject of frantic bidding amongst interested parties with more than 100 enquiries for the chain, according to the administrators. This is because although the group had overloaded itself with debts it could not repay due to an aggressive expansion strategy, its underlying business was successful and was continuing to generate a profit. However, £750 million of debt was sufficient to drag it under, especially when its banking support was withdrawn by Royal Bank of Scotland, puzzling many in the industry.
Edinburgh Woollen Mill is a hardy business and has been trading for many years with its target market very definitely older clientele. Last year it was also quick to purchase Jane Norman when the fashion retailer was forced into administration and its latest acquisition of Peacocks ensures that it now has a good presence with a younger market too.
Edinburgh Woollen Mill has announced that it will be closing 224 of the outlets with immediate effect, a move that will surprise many who thought that the administrators, KPMG, would have held out for a better offer before selling. But with such substantial debts and no financial backing, there was a need for a quick sale as there was only a very limited capacity to keep the chain trading on the funding available. Of the stores that will be closed, 160 lie in England, 11 in Wales, 30 in Scotland and 20 in Northern Ireland.
Joff Pope, one of the joint administrators responsible for Peacocks, admitted it was ‘unfortunate’ that job losses had been sustained, but said that he was ‘pleased’ that the bulk of the business had been ‘preserved.’
Fellow administrator at KPMG, Chris Laverty, said that the decision over which stores to close had not been solely based on performance but a strategic business plan, to ensure a market presence in towns where there were competitors such as Matalan and Primark.
But not everyone was unhappy with the resolution as the new owners insisted it was essential that Peacocks retains its Welsh identity and has said there are no plans to close the headquarters, currently situated in Cardiff Bay.
There had been fears that any new owner would seek to incorporate head office operations into an existing business but the remaining 250 backroom jobs in Wales have been spared, although 249 have already been made redundant from the headquarters.
The Lib Dem MP for Cardiff Central, Jenny Willott, publicly welcomed the news and said she was ‘reassured’ by the takeover, although saddened to hear that one in three staff would be losing their jobs across the group.
The deal means that although 224 stores will close, there will be 338 which remain open, along with a further 57 concessions and three distribution centres. Although Royal Bank of Scotland pulled out of funding Peacocks before their collapse, Barclays had been willing to continue to offer financial support and they have now teamed up with Santander to provide backing to the new owners.
The chief executive of Edinburgh Woollen Mill, Phillip Day, admitted that retailers are battling a ‘tough economic environment’ and said that getting Peacocks back on its feet would take ‘a considerable amount of work.’ However, he added that the group were ‘looking forward to working with our new colleagues’ and said he hoped to be able to ‘excite the customer with great products’ in the coming months.
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