High street fashion chain Edinburgh Woolen Mill (EWM), which owns Peacocks and Jaeger, is on the verge of collapse. There are 24,000 jobs available, according to records filed with the High Court.
The company has filed a letter of intent to appoint administrators to look for potential buyers to prop up the troubled deal.
The bosses wrote to employees Friday morning warning them that the national and local lockdowns had seriously affected sales.
The company added that it was hit hard by allegations it denies that the retailer and several competitors failed to pay some Bangladeshi suppliers during the lockdown to cut the cost of clothing they were unlikely to sell.
With the move of EWM, owned by businessman Philip Day, FRP’s bankruptcy specialists will conduct an urgent review for 10 days before any further action is taken.
All deals will continue to trade and further details will be announced in due course, the company added, but significant changes are expected.
Steve Simpson, CEO of EWM, said: “Like any retailer, we have found the past seven months to be extremely difficult.
“This situation has worsened over the past few weeks as we grapple with a number of false rumors about our payments and trades that have impacted our credit insurance.
“EWM has traditionally always traded with strong cash reserves and a conservative balance sheet, but those stories, the reduction in credit insurance against the backdrop of the lockdown and now this second wave of Covid-19 and all local locks made normal trading impossible.
“As directors, we have an obligation to the company, our employees, our customers and our creditors to find the best solution in this brutal environment.
“That’s why we requested a brief respite from court today to review our options before we appoint administrators.
“I hope and believe that through this process we can secure the best future for our company, but there will inevitably be significant cuts and closings as we work on it.
“I would like to thank all employees for their great efforts during this time and also our customers who have remained so loyal and committed to our brands.”
An FRP spokesperson said: “Our team is working with the directors of a number of subsidiaries of the Edinburgh Woolen Mill Group to review all options for the future of its retail brands Edinburgh Woolen Mill, Jaeger, Ponden Home and Peacocks.”
The move came just hours before Chancellor Rishi Sunak was due to present new plans to protect jobs and companies affected by the second wave and new measures.