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February 21, 2012 11:49 pm
Edinburgh Woollen Mill, the UK retailer that bought Jane Norman, has returned to the auction of Peacocks as an 11th hour bidder for the value fashion chain.
KPMG, administrator to Peacocks, which collapsed last month, has been locked in talks with SKNL about the Indian supplier to Peacocks acquiring a substantial number of stores. A deal had been expected to be concluded earlier this week.
Privately owned Edinburgh Woollen Mill looked at Peacocks earlier in the sale process, but abandoned its interest 10 days ago. However, it has returned to the bidding this week, throwing a deal with SKNL into doubt.
KPMG declined to comment last night on the state of the negotiations.
However, it is thought that a deal to sell a substantial number of Peacocks stores, saving the jobs of some of the chain’s 9,000 staff, could be reached as early as today.
Peacocks has almost 600 stores, and whoever buys the business is unlikely to take on all of them. About 150 closures have been suggested. Peacocks collapsed into administration in January after a last-minute rescue deal, put together by the chain’s chief executive Richard Kirk, with the support of its then chairman Allan Leighton, fell apart.
The deal, backed by Monaco-based investor Mark Rose, collapsed after a late change in the terms.
Mr Kirk and Mr Leighton battled to save the chain – which had £240m of net debt – after Royal Bank of Scotland walked away from a complicated debt-for-equity swap. Edinburgh Woollen Mill is no stranger to picking up challenged businesses. It bought the bulk of Jane Norman’s stores by way of a pre-pack administration last year. It was the underbidder for Bonmarché, the Peacocks subsidiary that was sold to Sun European Partners, and also looked at Blacks Leisure, which was sold to JD Sports.
Potential bidders including private equity groups circled Peacocks after it collapsed into administration and KPMG put it up for sale. However, the ranks of likely buyers thinned in the following weeks. Supermarkets and discount retailers have also been among those looking to pick up Peacocks stores if no buyer is found.
Staff at Cardiff-based Peacocks have been campaigning against the group being broken up if a rescuer is found, and calling for its head office and distribution centre to remain in Wales.
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