3,100 jobs lost but Peacocks is saved
Wednesday 22 February 2012
More than 3,000 jobs were lost today after ailing fashion chain Peacocks was sold out of administration.
The deal with Edinburgh Woollen Mill will save 388 shops and more than 6,000 jobs but administrators from KPMG said it had been forced to close 224 stores with immediate effect, leading to 3,100 redundancies.
Chris Laverty, joint administrator at KPMG, said: "Today's deal ensures 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."
Edinburgh Woollen Mill, which has 380 stores, will keep the Cardiff headquarters of Peacocks but KPMG said 16 jobs will go in the city.
Peacocks collapsed under a debt mountain last month in the biggest retail failure since Woolworths, placing 7,500 jobs in jeopardy.
Edinburgh, which beat off Indian textile and clothing giant S Kumars Nationwide, said it would attempt to save some of the stores and jobs being lost today.
However, chief executive Philip Day added: "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."
Edinburgh last year bought 33 of Jane Norman's 94 stores out of administration, saving some 400 jobs.
Fashion chain Bonmarche, which was part of the Peacock Group, was sold last month in a deal that will lead to 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores and will continue to employ 2,400 staff.
Privately-owned Edinburgh Woollen Mill, which is based in Langholm, Scotland, is to take on 338 stores, 50 concessions and three distribution centres as part of the deal. It said Barclays and Santander had helped fund the acquisition.
KPMG had already announced 249 redundancies from Peacocks head office in Cardiff. Combined with the 1,400 job losses at Bonmarche, the total number of jobs lost in the failure of Peacocks is now about 4,750.
The chain, which was owned by hedge funds Och-Ziff and Perry Capital, collapsed under its £240 million of net debt despite strong trading.
Its profit margins also came under pressure from the frenzy of discounts on the high street as shoppers reined in spending.
Peacocks can trace its history back to Warrington, in Cheshire, in 1884 when Albert Frank Peacock founded Peacock's Penny Bazaar. It moved to Cardiff in 1940.
The business developed and expanded in the 1990s, floating on the London Stock Exchange in 1999. The Peacock Group acquired low-cost retailer Bonmarche in 2002.
The company delisted from the London Stock Exchange to become a privately-owned business once again in 2006 and broke the 500 stores mark in 2008.
John Gorle, a national officer for the Usdaw union, said: "While this is obviously fantastic news for those workers whose jobs have been saved, it is absolutely catastrophic news for the 3,100 people now facing the dole queue and this remains one of the worst redundancy situations of recent years, with Scotland being particularly hard hit."
He added that Usdaw will be seeking a meeting with Edinburgh Woollen Mill as soon as possible to discuss its plans.
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