20 Nov Fashion empire collapse leaves 5,000 jobs at risk
Nearly 5,000 retail jobs have been put at risk after Peacocks, Jaeger, Austin Reed and Jacques Vert collapsed into administration when the deadline for a rescue expired.
The fashion chains, which were part of Philip Day’s Edinburgh Woollen Mill group, had been vulnerable for the past month while administrators at FRP tried to find a buyer.
Administrators said yesterday that they remained in advanced discussions with a number of parties and were “working hard to secure a future” for the fashion retailers. They added that there would not be any immediate redundancies for the 4,700 staff.
Peacocks has 4,369 employees in 423 stores while Jaeger, which was founded in 1884, has 76 outlets and employs 347 staff. Questions were raised last night about the number of jobs at risk as Mr Day’s representatives had originally claimed that he employed 21,500 staff. Administrators said that the number was closer to 10,000, even once staff employed by Edinburgh Woollen Mill, Ponden Home and at the group’s headquarters were included.
Mr Day, who is based in Switzerland, had been coined the “new king of the high street” because of his reputation for taking on struggling retail groups.
Last year the Day family took £16.5 million in dividends, on top of a £6.6 million payout in 2018.
He had been working to save Peacocks, regarded as the crown jewel of his portfolio, with Davidson Kempner, a US hedge fund. Negotiations have been thwarted by the uncertain trading environment and the potential for more lockdowns.
The most likely outcome remains a pre-pack administration for the fashion labels. In that scenario the buyer would not have to take on liabilities such as its pension scheme and stores.
Jaeger has attracted interest from Marks & Spencer; Mike Ashley’s Frasers Group; Harold Tillman, the former owner of Jaeger, and Torque Brands, the investment group that bought TM Lewin. Industry sources believe, though, that the most likely buyer for Jaeger will be Mr Day, who is a secured creditor.
An Edinburgh Woollen Mill spokesman said: “In recent weeks we have had constructive discussions with a number of potential buyers for Peacocks and Jaeger but the continuing deterioration of the retail sector due to the impact of the pandemic and second lockdown have made this process longer and more complex than we would have hoped.”
In a letter to staff, Edinburgh Woollen Mill said that the administration was a “desperately difficult decision for us to make but in the end we felt we had no choice. Unfortunately the deteriorating commercial environment and the uncertainty over when the current lockdown may be lifted has made those conversations more complex.”