As Edinburgh Woollen Mill swoops again to save another high street fashion chain, Channel 4 News asks how many other retailers faced with bankruptcy may be rescued from the brink.
Despite the deal, which will see Edinburgh Woollen Mill save 388 Peacocks shops and more than 6,000 jobs, 3,000 jobs will still be lost. Edinburgh Woollen Mill is understood to have re-entered the race to buy Peacocks over the weekend, according to the trade magazine Drapers.
Administrators from KPMG said they 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.”
She added: “Obviously it had difficulties recently but I think that was largely due to the fact it had too many shops. Also, there’s a huge amount of competition in that part of the sector, especially from online retailers.”
In summer 2011, Edinburgh Woollen Mill rescued 400 jobs when it bought up stores from the mid-market Jane Norman fashion chain,which went into administration following cash flow difficulties. Both purchases from the younger, more high-volume sector of the market seem to mark a new direction for the brand which has a much older, more traditionally-minded demographic.
Read more on the fight to save the familiar names on the high street in our special report: Death of the high street
In particularly trying times for the UK high street, where a number of well-known and loved brands are fighting to stay afloat, the news that at least some jobs have been saved is welcome.
Sarah Peters told Channel 4 News despite obvious fears surrounding news of a company calling in the receivers, it is not so unusual for firms to move in and out of administration.
“Over time, some chains have come out of administration – people like Ethel Austin, which have been in administration several times and have come back under the same or different names.
“In footwear, Barratt – Price Less went into administration, but it looks like one of the brands from that group, Dolcis, may be getting a new lease of life and could be relaunched as a separate brand. Elsewhere, Faith, for example, went into administration in 2010, but still exists albeit as a brand within another store.
“In other areas, Homebase of course bought Habitat and it was going to relaunch the brand within its stores to help increase footfall into its outlets.”
Despite the phoenix-like rise of Peacocks from administration, the budget and value end of the retail sector appears to be doing comparatively well.
A recent study by PriceWaterhouseCoopers and the Local Data Company looked at 500 of the biggest town centres in the UK and found that shops selling books, electrical items and home furnishings were the hardest hit, along with pubs and off licences.
Analysts say that the loss of chain stores is a change from the normal pattern of the past few years, which have seen an expansion of larger retailers as small independent stores closed branches. With some of the more recent rescues of chains such as Peacocks and Jane Norman being accompanied by the shedding of some of those chains’ branches, store groups appear to be lowering overheads by maintaining fewer outlets.
But it does not look as if 2012 will be see calm descend on the torrid high street, despite January’s unexpected jump in retail sales. Sarah Peters predicts: “In terms of overall trends, it’s still going to be a difficult year for the high street.”