Collapsed fashion chain Peacocks has been bought out of administration by a senior executive with backing from a consortium of international investors, saving 200 stores and 2,000 jobs.
Peacocks, which was part of billionaire Philip Day’s EWM Group retail empire, went into administration last November. The Cardiff-based chain operated 423 stores with 4,369 staff before its collapse.
Now, chief operating officer Steve Simpson will take over the business with support from international investors, reopening 200 stores and saving 2,000 jobs.
According to reports, Mr Simpson’s agreement with administrators snatched the Peacocks brand from under the nose of Sports Direct tycoon Mike Ashley.
The consortium of international backers are primarily based in Dubai, where former owner Mr Day lives, though he will have no control of the retailer.
Members of the consortium have chosen to remain anonymous and the amount paid to save Peacocks has not been disclosed.
Mr Simpson, who has been described as Mr Day’s right hand man, hopes to reopen stores once lockdown restrictions on non-essential retailers ease.
He has no financial stake in the company but will lead the existing management team under a new firm, Purepay Retail, which will be funded by the international consortium.
It comes after Purepay Retail also took over the EWM and Bonmarche brands of Mr Day’s empire, again supported by the international consortium.
Peacocks has been bought out of administration by a senior executive with support from international investors, saving 200 stores and 2,000 jobs
Mr Day was the biggest creditor of Peacocks and is owed money by the business he once owned.
Administrators FRP negotiated a deal with him by signing a deferred loan agreement between the consortium of investors and the businessman which will eventually see him get his money out of the company.
The deal essentially sees the EWM brands – excluding Jaeger which was sold to Marks and Spencer – reform under the old management led by Mr Simpson.
Mr Day will not be in control of the business – ending several decades of involvement in the UK high street – and will hope to recoup the cash he invested as a secured creditor through the deal.
Mr Day and his family do not have a stake in the consortium, or in Purepay Retail Limited.
However, the consortium has agreed to pay the billionaire an undisclosed amount of money for the businesses, in installments, over the next few years.
Unsecured creditors, including landlords, suppliers and the taxman, will lose out and are unlikely to get their money back.
Peacocks was one of the most high-profile victims of a high street bloodbath that saw several retailers close amid the coronavirus pandemic.
The chain had a poor online presence compared with rivals and – along with Arcadia and Debenhams – struggled to recoup business through its websites, leading to its collapse.
Figures revealed on Sunday showed how almost 190,000 jobs have been lost and more than 15,000 stores forced to close since the first national lockdown.
Peacocks went into administration at the same time as Jaeger, another member of the EWM group. Both retailers confirmed at the time that they had appointed administrators from FRP Advisory.
Jaeger, which was bought by Mr Day in May 2017, ran 76 stores and concessions and employed 347 staff.
The two companies were put into administration after a two-week deadline to find a buyer passed.
High street giant Marks & Spencer has since bought Jaeger – thought it purchased the intellectual property only, allowing it to sell Jaeger-branded goods on its website as a third-party brand. No jobs were saved.
Mr Day’s EWM Group had already placed its Edinburgh Woollen Mill and Ponden Home business into administration a few weeks before Peacocks and Jaeger.
FRP joint administrator Tony Wright said at the time: ‘Jaeger and Peacocks are attractive brands that have suffered the well-known challenges that many retailers face at present.
‘We are in advanced discussions with a number of parties and working hard to secure a future for both businesses.’
Peacocks was founded in Warrington back in 1884 first as a penny bazaar. It expanded quickly over the decades and moved into Wales to base itself back in the 1940s.
The relocation accelerated its growth and saw it listed on the London Stock Exchange back in 1999.
It was taken over following a £400million management buyout in 2005, making it again privately owned.
But six years later is was put into administration and 250 head office staff were made redundant.
In February 2012 is was sold to Edinburgh Woollen Mill Group, who had hoped to open hundreds more branches.
The Centre for Retail Research revealed that 188,685 retail jobs in the UK vanished between the start of the first lockdown on March 23 2020 and March 31 this year.
The figures revealed that 83,725 jobs lost in the period were due to administrations, including major collapses by Debenhams and Sir Philip Green’s Arcadia Group.
Meanwhile, around 11,986 jobs were cut during Company Voluntary Arrangement (CVA) restructuring processes.
Another 92,974 jobs were axed through rationalisation programmes, which included supermarkets Sainsbury’s and Asda cutting thousands of roles.
The devastating impact of the pandemic resulted in 15,153 store closures in shopping destinations across the UK, the figures also revealed.
According to real estate adviser Altus Group, up to 401,690 shops are currently shuttered around the country and could reopen in the next stage of the Prime Minister’s road map out of lockdown.
Retail bosses have raised concerns that the high street will still be very challenging for retailers despite the easing of restrictions, as business rates payments return for many.
Robert Hayton, UK president of property tax at Altus, warned that the current business rates regime could bring further devastation.
He said: ‘Come July 1, large retailers in England will effectively be returned to full business rates liabilities, calculated by reference to rents being paid six years ago, bearing no resemblance to the here and now, with the fundamental right of appeal to seek valuation adjustments being retrospectively removed.’
A Government spokeswoman said: ‘We have continued to support the retail sector throughout the pandemic, including our new £5billion Restart Grant scheme, extending the furlough scheme and the VAT cut, providing 750,000 businesses in retail and other sectors with business rates relief and a £350billion package to support jobs and livelihoods.
‘As we build back better from coronavirus we want to see our highstreets thrive.
‘We have put in place an accelerated £1 billion Future High Streets Fund, a £4.8 billion Levelling Up Fund and are working with local leaders through the High Street Taskforce, all to support town centres, high street regeneration and drive growth across the UK.’
Meanwhile, Helen Dickinson, chief executive of the British Retail Consortium, said high streets will ‘absolutely’ feature shops in future, but said the Government needs to act to bring down the burden of business rates.
She was asked about the reality of both chains and independent shops disappearing from high streets, and told BBC Breakfast: ‘That is a real thing and as I said that was a real thing that was happening before March 2020.
‘And you know there are huge numbers of reasons behind that and one is this sort of shift to online which you were mentioning, and that is where there will be fewer shops in the future, but there absolutely will remain shops in high streets.
‘But what we need to align behind is real reimagined town centres and high streets that include retail but that go beyond retail.’
Ms Dickinson said retail needs to be economic for people to operate, adding: ‘That’s where Government has a really vital role.
‘People in retail, and in hospitality, anybody who operates commercial premises, always talks about business rates.
‘So these are the taxes that are paid on shops, on restaurants, on coffee shops, and they have just become completely out of line with the economic reality of operating, and so the Government needs to act there to bring that burden down, and that will facilitate much more investment that we need to see to maintain local jobs in local communities and stop those boarded-up shops and restaurants up and down the country.’
This post first appeared on Dailymail.co.uk