Unable to close deals with potential buyers before the expiration of a standstill agreement, Peacocks and Jaeger on Thursday fell into administration, the equivalent of a U.S. bankruptcy.
Parent company Edinburgh Woollen Mill Group (EWM) last month filed a notice of intent to appoint administrators, then sought an extension to secure a rescue package to save its value chain Peacocks and Bonmarche. Since then, the Edinburgh Woollen Mill brand collapsed into administration earlier this month. Peacocks and the fashion brands under the Jaeger operation, part of the EWM Group, were not a part of the insolvency. The aim was to try to finalize a pre-packaged arrangement for Peacocks and Jaeger during the 10-day extension.
Billionaire owner Philip Day is believed to be negotiating with American hedge fund Davison Kempner to save Peacocks. Jaeger, which includes the Jacques Vert and Austin Reed brands, drew attention from Fraser Group CEO Mike Ashley, and Torque Brands, which earlier this year acquired U.K. shirt-maker TM Lewin.
The collapse of Peacocks and Jaeger puts over 4,700 jobs at risk. So far no layoffs have been announced nor any store closures. Between the two operations, about 500 stores could be at risk. Talks with potential buyers for Peacocks and Jaeger are believed to be still ongoing, and the two businesses still stand a chance to be saved.
EWM Group had previously hired FRP as the advisory firm to conduct a valuation of the business. Tony Wright, the joint administrator and partner at FRP, described Peacocks and Jaeger as “attractive brands” that have suffered the challenges faced by many retailers due to the coronavirus pandemic. “We are in advanced discussions with a number of parties and working hard to secure a future for both businesses,” he said.
EWM blamed the collapse to the “continuing deterioration of the retail sector due to the impact of the pandemic and second lockdown,” adding that talks with potential buyers continue. Data from retail intelligence firm Springboard expects retail footfall on Black Friday will plunge 59 percent from last year’s level, snuffing out any hope of recovering losses incurred earlier this year.
Separately, the Days Department Store in Wales, named for EWM owner Day, is reportedly preparing to shutter operations after the country locked down for 17 days last month because of rising virus cases, although nonessential retailers reopened on Nov. 9.