The Edinburgh Woollen Mill Group is on the brink of administration – affecting around 24,000 workers at fashion brand including Peacocks and Jaeger.
The group’s boss said tough trading since the pandemic had been followed by “false rumours” about trading that had hit its ability to get credit insurance.
The move is a marked change in the fortunes of a group which has acquired other businesses.
Edinburgh Woolen Mill dates back to 1946 to the Scottish Borders town of Langholm when Drew Stevenson set up what was originally the Langholm Dyeing and Finishing Company. Its first shop was opened in Edinburgh in 1970. As well as Peacocks and Jaeger, its current brands include Ponden Home and the James Pringle Weavers site in Anglesey.
The group has now filed a notice of intention to appoint administrators to give it breathing space. All stores will continue trading for now.
EWM Group chief executive Steve Simpson said: “Like every retailer, we have found the past seven months extremely difficult.
“This situation has grown worse in recent weeks as we have had to deal with a series of false rumours about our payments and trading which have impacted our credit insurance.
“Traditionally, the group has always traded with strong cash reserves and a conservative balance sheet but these stories, the reduction in credit insurance – against the backdrop of the lockdown – and now this second wave of Covid-19 and all the local lockdowns, have made normal trading impossible.
“As directors we have a duty to the business, our staff, our customers and our creditors to find the very best solution in this brutal environment.
“So we have applied to court today for a short breathing space to assess our options before moving to appoint administrators.
“Through this process I hope and believe we will be able to secure the best future for our businesses, but there will inevitably be significant cuts and closures as we work our way through this.
“I would like to thank all our staff for their amazing efforts during this time and also our customers who have remained so loyal and committed to our brands.”