Threatened value clothing retailer Peacocks has been bought out of administration today but as many as 224 of its high street stores are now set to close.
Retail group Edinburgh Woollen Mill, which purchased similarly struggling Jane Norman last year, has acquired 388 of Peacocks‘ stores & concessions along with its headquarters and logistics properties based in Wales.
The deal, announced by administrators KPMG, has secured 6,000 jobs at the business but the closure of more than a third of its shops means there will also be 3,100 operational redundancies and a further 16 job lost at its head office.
Chris Laverty, joint administrator and restructuring partner 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.
“Like many other retailers, Peacocks suffered from a decline in consumer spending due to the tough economic conditions and this, combined with a surplus of stores and unsustainable capital structure led to the business becoming financially unviable.
“However, a strong brand presence and loyal customer following meant that Peacocks attracted a great deal of interest from both trade and private equity bidders, leading to today‘s successful sale.”
Peacocks entered administration in January after a last minute deal by its management team fell through.
BonmarchÃ©, formerly part of the Peacocks group, was sold to private equity firm Sun Capital last month in a deal that saw around 1,500 employees lose their jobs.
Edinburgh Woollen Mill‘s acquisition of Jane Norman in June cost 1,200 retail jobs as a third of its stores across the UK were closed.