Peacocks and Jaeger owner faces collapse with 21,000 jobs on line

BILLIONAIRE Philip Day’s retail empire, including Peacocks and Jaeger, is on the brink of collapse, with more than 21,000 jobs at risk.

Edinburgh Woollen Mill, which also owns Austin Reed and Jacques Vert, is poised to appoint administrators at FRP Advisory if it fails to find a buyer for some or all of the brands.

Mr Day’s chains, amassed over the years and often bought from previous administrations, have more than 1,000 branches between them.

The retailer has lodged a notice of intent to appoint administrators with the High Court, which is meant to prevent creditors such as suppliers or landlords from claiming any money for 10 days before a formal appointment is made.

Steve Simpson, the chief executive, said that although he hoped to secure the best future for the business, there would inevitably be significant job cuts and store closures. Bosses wrote to staff yesterday morning saying that the national and local lockdowns had hurt sales very heavily.

However, it mostly blamed a dispute with suppliers in Bangladesh for its current position after credit insurers pulled cover and left the business exposed.

Credit insurance protects suppliers against the risk of customers going bust between an order being placed and the payment being made. When insurers stop or withdraw cover, suppliers can demand payment upfront, putting pressure on retailers and their finances.

Suppliers in Bangladesh said in the summer they were owed millions of pounds for cancelled orders since the pandemic hit, which Edinburgh Woollen Mill denied. The retailer said that it was hit hard by these allegations and claimed it had paid most of its outstanding debt.

Last month, John Herring, the company’s chairman, wrote to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) stressing that their comments had put Edinburgh Woollen Mill in a “critical position” with credit insurers.

All stores will continue trading and further details will be announced in due course, the company added, but significant changes are expected.

According to legal documents, lawyers at Dentons are advising Edinburgh Woollen Mill.

The retail sector is one of the industries to suffer the most as a result of lockdowns to curb the spread of coronavirus. Despite a rise in sales after restrictions ended in June, retailers have slashed thousands of jobs in attempts to survive.

The move yesterday came just hours before Rishi Sunak, the Chancellor, unveiled plans for a new six-month furlough scheme targeted at helping businesses and j obs hit by new l ocal lockdown measures in the second wave of coronavirus infections.