UK retailer EWM Group, owned by Dubai-based British billionaire Philip Day, has sent out notices to employees warning them of job cuts as it struggles to keep afloat. To mitigate job losses, the company said it would be appointing administrators.
EWM Group, the owner of clothing brands such as the Edinburgh Woollen Mill, Peacocks, Austin Reed, Bonmarche and Formal Tailoring 1885 Ltd., said it planned to sell some parts to shore up its finances. Currently, the company employs around 24,000 people.
"We have applied to court today for a short breathing space to assess our options before moving to appoint administrators. There will inevitably be significant cuts and closures as we work our way through this," the group's chief executive officer Steve Simpson said.
In the UK, handing over a near-insolvent business to administrators can lead to it being closed. However, depending on the amount of debt and the available assets that can be liquidated, some companies emerge from the process and continue their business.
EWM Group is the latest UK retailer to announce restructuring after incurring losses during the months of forced store closures owing to the pandemic. Other retailers that have cut jobs and closed stores include Marks & Spencer, Harrods, Arcadia, TM Lewin and Walgreens-owned Boots. Between the aforementioned companies, more than 12,800 employees have been laid off.
The situation has been particularly hard for EWM Group as most of its core Edinburgh Woollen Mill stores are located in the north of Britain. Restrictions have continued to be tight there following the emergence of new infections. Analysts said most of the brand's customers tend to be older - which means most will find it hard to visit stores.
Like other countries, the UK's economy has been struggling to recover from the effects of the pandemic. According to official data, the UK's gross economic product grew by about 2.1% only in August. This was less than half of what economists had expected following the lifting of pandemic restrictions.
