The high street retailers Edinburgh Woollen Mill, Ponden Home and Bonmarché have been bought out of administration in a rescue deal, which will save almost 2,500 jobs and 300 stores.
The chains, part of the Edinburgh Woollen Mill Group controlled by the billionaire Philip Day, collapsed last year as Covid-19 restrictions led to financial difficulties.
The Edinburgh Woollen Mill chain, known for its knitwear, as well as the homeware retailer Ponden Home and the fashion brand Bonmarché have been bought by Purepay Retail, a company backed by a consortium of international investors.
Purepay has acquired all of the chains’ remaining stock, as well as the head office site and a distribution centre in Carlisle.
The company will operate 246 Edinburgh Woollen Mill and Ponden Home stores under licence, while 1,453 staff will transfer across to the new owner. Purepay will also take over about 1,000 Bonmarché staff and about 50 stores that operate under that fascia.
The administrators FRP said the remaining 85 Edinburgh Woollen Mill stores and 34 Ponden Home stores would remain permanently closed, with 485 staff being made redundant.
Those job losses are on top of the 860 announced when Edinburgh Woollen Mill chain and Ponden Home fell into administration in November, and 64 branches were closed down.
Purepay is a secured creditor to the business, and Philip Day remains a secured creditor, although the rescue deal signals the end of Day’s control of the businesses.
The Guardian understands that Day will effectively temporarily forego receiving money he can claim, so the new owners have working capital to operate the retailers.
Tony Wright, the joint administrator at FRP, said the Purepay deal provided “the best chance to save stores and jobs”.
However, he added: “With such little visibility on future trading conditions in UK retail, we regret that not all of Edinburgh Woollen Mill and Ponden Home could be rescued. This has resulted in a significant number of redundancies at a particularly challenging time of year and period of economic uncertainty.”
Philip Day’s Edinburgh Woollen Mill group owned a stable of brands, also including Jaeger and the low-cost clothing retailer Peacocks.
Marks & Spencer announced on Monday it had bought the Jaeger fashion brand from administrators, in a deal that includes Jaeger’s stock and assets, but not its 63 stores. Peacocks remains in administration.
Bonmarché’s administration was handled separately to Edinburgh Woollen Mill and Ponden Home, but it is included in the rescue deal.
Day only bought the chain, which had 225 shops and about 1,500 staff, out of administration in February 2020. Day, who lives in Switzerland and owns a castle in Cumbria, initially built his retail empire by acquiring a string of businesses out of administration.
Day’s Edinburgh Woollen Mill Group sounded the alarm last October that it was on the brink of collapse.
Coronavirus restrictions and store closures proved the final challenge for retailers, including Debenhams and Philip Green’s Arcadia group, which were suffering from sluggish sales and online competition even before the pandemic hit.