Collapsed UK high street fashion retailer Peacocks has been bought out of administration, by a group owned by entrepreneur Philip Day.
The move will secure the future of more than 2,000 jobs and 200 of the company’s 423 shops across the UK.
Since its collapse in November last year, largely as a result of the impact of the COVID-19 pandemic, administrators FRP have tried to secure a buyer for the firm.
Prior to the administration, it was owned by Edinburgh Woollen Mills (EWM) – owned by billionaire Day.
The buyers of Peacocks are an international consortium, lead by Peacocks’ former CEO, Steve Simpson, who is aiming to reopen the stores once non-essential retailers are allowed, following the most recent national lockdown.
EWM Group is a private investment group controlled by the Day family, which is currently still owed money by Peacocks.
Currently, the company has more than 1,850 store staff on furlough.
The financials surrounding the deal have not been announced.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown shared her views with Business Leader.
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.
It comes less than a week before fashion stores will be able to fling the doors open once more, and the chain should get an immediate boost from pent up demand from consumers keen to return to physical shops.
Leading the rescue is Steve Simpson, the chief operating officer of Edinburgh Woollen Mill, which was saved under a similar deal along with Bonmarche in January. He 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.
Peacocks will be a much leaner beast emerging from the crisis, with its footprint of around 400 stores halved under the deal. Shedding the excess weight of underperforming outlets will help it be more nimble but getting the online offering into better shape will be even more crucial, given its rivals are seen as racing ahead. Investors clearly want to see a Phoenix emerging from the ashes of the high street, but there is still a chance it could end up a turkey, if turnaround chances are missed.
Like Arcadia Group, Peacocks former owner, Edinburgh Woollen Mill, struggled with the accelerated shift to digital brought on by the pandemic. It was another sprawling retail empire which collapsed, with former rivals picking over the spoils. 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.