Edinburgh Woollen Mill: the vultures circle
Thousands of workers look set to lose their jobs, but the man whose fortune they made will have no trouble hanging onto his millions.
As the retail sector continues to stagger under the twin blows of overcapacity and botched government handling of the pandemic, Edinburgh Woollen Mill and its sister Ponden Hill have gone bankrupt. Already 866 jobs have been axed and many more hang in the balance.
Sixty-four stores are gone for good whilst the remainder are for the moment on life support as administrators look for a buyer. Other parts of the crumbling Edinburgh Woollen Mill Group empire, including Jaeger and Peacocks, are also hoping to be ‘rescued’ – or more likely broken up and asset-stripped – by bargain-hunting vulture capitalists.
Edinburgh Woollen Mill started life back in 1946 in Carlisle, establishing a reputation for production and retail of quality knitwear and homeware. In 2001, a former boss at Aquascutum, Philip Day, participated in the £49m equity-backed buy-out of Edinburgh Woollen Mill Group, now grown into a business empire employing over 20,000 workers.
Day proceeded to buy out his fellow shareholders, then used the EWM Group as a vantage point from which to snaffle up one failing business after another. On the side, he also has a controlling share in the Bonmarché fashion chain.
In short, Day has his fingers in a huge number of pies, but is now reported to want to cut his losses and reduce his liabilities as many of the brands he commands start to wobble uncontrollably.
But Philip Day is doing very nicely thank you. His family has garnered over £24m in dividend payments since August 2018, and as of March last year the EWM Group was sitting on a cash balance approaching £118m.
And by logic-defying alchemy that turns the base metal of debt and failure into gold, the Guardian reports: “Day will have a big say in the future of the company even if administrators are appointed on Thursday as he holds a charge over certain assets of the group – making him first in line above other creditors to recover debts.” (Edinburgh Woollen Mill owner races to thrash out rescue deal by Sarah Butler, The Guardian, 18 October 2020)
So, as thousands of British workers in retail contemplate life on the dole, Philip Day, who lives in Switzerland and owns a castle in Cumbria, can get on with counting his millions in peace.
