Peacocks takeover: Edinburgh Woollen Mill buy retailer but 3,100 jobs lost
Fashion retailer Peacocks has been sold out of administration to Edinburgh Woollen Mill, saving 6,000 jobs, but 3,100 staff will be made redundant.
It means that 6,000 jobs across the UK will be safeguarded, including around 250 at the head office in Cardiff.
The deal will include 338 stores, 57 concessions, three distribution centres and the head office, said Edinburgh Woollen Mill.
But 224 stores have ceased trading with immediate effect.
The announcement was made by KPMG, joint administrators of Peacocks, who were called in in January.
Joff Pope, joint administrator and associate partner at KPMG, said the deal would ensure the continued trading of a well known name on the high street.
"While it is unfortunate that redundancies have been necessary, we are pleased that we have been able to preserve the majority of the business and jobs," he said.
Peacocks, with 611 stores and 49 concessions across Britain, had employed 9,100 people.
But it went into administration in January having failed to restructure a key £240m part of its total £750m debt.
Those stores closing including more than 160 in England, 30 in Scotland, 20 in Northern Ireland and 11 in Wales.
The Retail Gazette described it as "one of the biggest losses to the high street since the end of the recession three years ago".
Mr Pope said like many other retailers, Peacocks suffered from a decline in consumer spending due to the tough economic conditions.
"This, combined with a surplus of stores and unsustainable capital structure, led to the business becoming financially unviable," he said.
Chris Laverty, one of the joint administrators at KPMG told BBC Five Live it was an opportunity for Edinburgh Woollen Mill to buy an established retailer.
"It's taking advantage of a great high street name, a very loyal customer following and great, committed employees."
Ms Laverty said it was a "tough break" for those stores closing immediately but bidders had a business plan, with a line drawn.
"They're looking for profitability, geographical spread of stores, where their nearest competitors like Matalan and Primark are. The 224 stores on that list are the ones at the bottom they decided not to go forward with," she added.
About 250 staff at the group's Cardiff HQ lost their jobs following administration, and there will be another 16 job losses in the city after Wednesday's sale - leaving around 250 staff.
Philip Day, chairman and chief executive of the Edinburgh Woollen Mill Group, based in Langholm in Scotland, said: "We look forward to working with our new colleagues to rebuild the business in what is a very tough economic environment for High Street retailers in the UK."
Mr Day said he hoped there would be scope to save more jobs and stores from those being forced to close due to performance issues and overhead pressures.
"As you can imagine, there will be a considerable amount of work to undertake over the next few months to stabilise the situation, turn this business around, get the supply chain moving again and excite the customers with great products," he said.
Barclays and Santander banks have agreed to help Edinburgh Woollen Mill Group with funding for the acquisitions.
Mr Day the acquisition would give further depth to the group's range of trading profiles and assert its position as one of the UK's leading High Street fashion and clothing retailers.
First Minister Carwyn Jones said he welcomed the fact that Peacocks would still have a future and employ a large number of people.
"The retention of the HQ in Cardiff in particular is good news," he said.
But Mr Jones added: "We wait to see the full details of how this announcement will exactly affect employees of Peacocks and we will provide all the support we can to those who face losing their jobs."
Welsh secretary Cheryl Gillan welcomed the sale.
"This buy-out signals a fresh start for the company and many of its employees, although sadly I understand there will be redundancies," she said.
Welsh Liberal Democrat enterprise and business spokeswoman Eluned Parrott AM added: "The outcome for Peacocks could have been so much worse and a pooling of resources with Edinburgh Woollen Mill is a very good fit, avoiding the danger of asset stripping and hopefully the closure of adjacent stores."
Plaid Cymru economic spokesman Alun Ffred Jones AM said it was "hugely important" for the Welsh economy that the head office remained in Wales, which had been confirmed.
"Many people will be relieved to hear that their jobs have been saved, however my sympathies go to those workers who have lost their jobs," he added.
LIST OF PEACOCKS STORE CLOSURES:
Redditch, Longton, Corby, Worksop, Telford (2), Wolverhampton, Tunstall, Brierley Hill, Scunthorpe, Bedford, Mansfield, Nottingham, Derby, Coventry (2), West Bromwich, Oswestry (joint with Bonmarche), Merry Hill, Leicester, Halesowen (joint with Bonmarche), Hanley, Stafford, Worcester, Sutton Coldfield, Southampton (Portswood Rd), Ashford, Gravesend, Grays, Slough, Newmarket, Fulham, Tooting, Ilford, Brentwood, Barking, Bishop's Stortford, Wokingham, Chatham, Crayford, Great Yarmouth, Leigh Park, East Ham, Shepherd's Bush, Lewisham, West Ealing, Dartford, Staines, Deptford, Hoxton, Wood Green, Forest Gate, Stratford, Leyton, Horley, Swanley, Ware, Royston, Basildon, Brighton, Chelmsford, Harlow, Erith, East Dereham, Uxbridge, Hemel Hempstead, Crawley, Banbury, Feltham, Newport IOW, Reading, Harringay, Southampton city, Lakeside, Thanet, Folkestone, Bury St Edmunds, Maidenhead, Wembley, Basingstoke, Newbury, Aylesbury, Canterbury, Kilburn, Watford, Woking, Norwich, Swiss Cottage, Hitchin, Bexley Heath, Hull (3), Middlesborough, Pontefract, Peterlee, Halifax, Killingworth, Seacroft (Leeds), Spennymoor, Sunderland, Rotherham, Brighouse, Durham, Huddersfield, Leeds - Crown Point, Doncaster, Metrocentre Gateshead, Thornaby, Newcastle upon Tyne, Sheffield city centre, Wakefield, Winsford, Barrow in Furness, Old Swan, Ellesmere Port, Huyton, Chesterfield, Kendal, Stockport, Liverpool (2), Warrington (Bridge St), Workington, Birkenhead, Southport, Manchester (2), Wigan, Blackpool, Preston, Birchwood (relocation), Cheetham Hill, Chester, Bury, Blackburn, Carlisle, Burnley, Bromborough, Bangor (Ireland), Craigavon, Carrickfergus, Antrim, Ballymoney, Banbridge, Ballynahinch, Ballyclare, Agherafelt, Lisburn, Ballymena, Portadown, Belfast (3), Londonderry, Cookstown, Coleraine, Belfast city centre, Bloomfield - Bangor (Northern Ireland), Kilmarnock, Port Glasgow, Saltcoats, Dunfermline, Blairgowrie, Leith, Dumfries, Clydebank, Cumbernauld, Dumbarton, Coatbridge, Hamilton, Glenrothes, Motherwell, Greenock, Meadowbank, East Kilbride, Dundee, Aberdeen (2), Falkirk, Inverness, Stirling, Glasgow Forge, Livingston, Elgin, Kirkcaldy, Cameron Toll, Strathkelvin, Musselburgh, Market Drayton, Whitchurch (Shropshire), Birmingham (St Andrews), Swadlincote, Maindee (Newport), Tewkesbury, Poole, Boscombe, Barnstaple, Tredegar, Exeter, Carmarthen, Tiverton, Llanelli, Yeovil, Nailsea, Bournemouth, Fishguard, Morfa Swansea, Parkstone Poole, Bristol (2), Taunton, Cardiff city centre x 2, Llanrumney (Cardiff), Llanelli - Parc Trostre, Cheltenham, Yate, Wrexham (relocation), Flint, St Austell, Launceston