ICSM Business New: Philip Day’s Edinburgh Woollen Mill Group owed £167 million to unsecured creditors

By Harry Mottram: When the retailing giant Edinburgh Woollen Mill Group (EWMG) empire went bust in 2020 creditors knew they were unlikely to get paid in full for unpaid invoices. What they may not have realised was the group owned by Philip Day would leave them nothing after his retailing group entered administration in 2020.

Writing for The Times, Isabella Fish reported: “EWM Group’s businesses, comprising Jaeger, Peacocks, Bonmarché, and Edinburgh Woollen Mill, collapsed into administration in 2020 after they were badly affected by the Covid pandemic. Most of its shops remained shut after the national lockdown was lifted. The Jaeger brand was rescued by Marks & Spencer in 2021, in a £7 million deal that did not include stores or concessions.

“The other three brands were subsequently bought back by an anonymous international investment consortium, backed by Steve Simpson. chief operating officer of Edinburgh Woollen Mill. The consortium packaged the businesses into a company named Purepay Retail, a dormant subsidiary of Edinburgh Woollen Mill Group incorporated in 2018, which observers criticised as a form of ‘phoenixing.’”

Ian Carrotte of ICSM said it was a sorry tale of suppliers being left with nothing having been given the old line of ‘we’re too big to fail,’ and ‘don’t you know who we are.’ He said: “Phoenixing is something that is particularly annoying for creditors as they see the company that failed to pay their invoices when it collapsed simply changing its name and continuing in business but not taking responsibility for the original insolvency.”

Georgia Wright, a journalist with the Retail Gazette reported: “Administrators’ reports for Peacocks, Jaeger and Edinburgh Woollen Mill show that unsecured creditors haven’t received a penny from what they were owed following the collapse. Documents seen by the outlet show that each of the parties are due to receive dividends worth up to £600,000 – £1.8m in total. Its Bonmarché brand, which collapsed owing unsecured creditors £23.5m, was moved to creditors’ voluntary liquidation in 2021, with reports showing that it did not have enough funds to pay out a dividend.”

Ian Carrotte said it was a shocking report by the administrators which revealed the scale of debt. “We understand that after the collapse of the group, M&S bought the Jaegar brand but not the 63 high street stores,” he said, “while an unnamed investment consortium picked up the other three brands and renamed the trio into a company named Purepay Retail.”

He said that it appears the administrators’ reports for Peacocks, Jaeger and Edinburgh Woollen Mill show that unsecured creditors, including trade suppliers and landlords, have received none of the money they were owed after the brands went bust.

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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk