Yahoo Finance Peacocks rescue deal saves 2,000 jobs
A rescue deal has been agreed for collapsed fashion retailer Peacocks, another retail casualty of the pandemic, that will allow up to 200 stores to reopen, and keep around 2,000 jobs safe.
The news comes as it is being reported that 188,685 retail jobs have vanished between the onset of the first national lockdown in the UK on 23 March 2020 and 31 March this year.
The owner of Peacocks, EWM Group, is a private investment group controlled by the Day family. It announced It had agreed to support a bid by an international investment consortium "who have agreed to provide sufficient working capital to enable the business to emerge from administration."
The transaction was negotiated by FRP, Peacock’s administrator. As leading secured creditor, EWM has agreed to utilise its security and provide a deferred loan to the consortium.
The bid was led by Steve Simpson, EWM's chief operating officer.
Simpson “will be under no illusions about the scale of the challenge he faces, but he has clearly convinced the consortium of investors backing him that there is high demand for the mid-market value ranges offered by the chain,” noted Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
“The Peacocks’ management team hope that, with the support of their partners, suppliers and landlords, they will be able to reopen up to 200 stores when the lockdown rules ease and protect approximately 2,000 jobs,” EWM said.
Last November, Peacocks, along with Jaeger, fell into administration after EWM failed to find a buyer for the fashion chains.
Earlier this year, Marks & Spencer (MKS.L) finalised a deal for Jaeger's stock and marketing assets for an disclosed sum, but Jaeger’s high street outlets were not part of the deal. This meant Jaeger had to permanently close 63 of its stores and concessions, putting hundreds of people out of work.
But it looks like Peacock has not suffered the same fate.
READ MORE: Nearly 190,000 jobs lost on UK high streets since first COVID lockdown
EWM said it hopes all 1,850 store staff currently on furlough will be able to return to work once stores reopen, along with more than 150 colleagues in head office and support and no job losses are planned as a result of the deal.
“EWM Group has remained committed throughout the administration to support any credible bids for its retail businesses that offered (the businesses) a viable future and preserved livelihoods as much as possible. It is pleased to have come to this agreement with FRP and the investment consortium and believes that Peacocks will have every opportunity to flourish under its new ownership,” it said in a statement.
Peacocks had 400 stores going into the pandemic a year ago and announced a series of job losses and store closures as it struggled to manage under the various restrictions.
"Peacocks has been given the wings to fly again in this deal and the reopening of half the stores should help breathe life into high streets reeling from the pandemic," Streeter said.
"Like Arcadia Group, Peacocks former owner, Edinburgh Woollen Mill, struggled with the accelerated shift to digital brought on by the pandemic. Billionaire Philip Day is one more powerful tycoon who appears to be making an exit from the UK retail scene. It’s a reminder that not keeping up with shoppers shifting tastes and habits, can seriously weaken once powerful brands and businesses," she added.
Earlier it was reported that the coronavirus pandemic saw unprecedented numbers of high street job losses and store closures since the first national lockdown in March last year when shops were forced to close.
So far, the COVID crisis has seen 15,153 store closures in shopping destinations across Great Britain.
Of the job losses, 83,725 of those lost in the period were due to administrations, such as the collapses of Debenhams and Sir Philip Green’s Arcadia Group.
WATCH: What is the Bounce Back Loan scheme?
