UK Fashion Companies are thinking about a job cut to protect the businesses from a pandemic related collapse, recent reports.
The owner of the retail clothing giant EWM Group, Philip Day said that the company is thinking about a restructuring of the business to save the brand. According to his statement, the company will lay off 24,000 employees and appoint an administrator.
The CEO of the company, Steve Simpson said, “We have applied to court today for a short breathing space to assess our options before moving to appoint administrators. There will inevitably be significant cuts and closures as we work our way through this.”
However, this is the situation for many British companies in pandemic times.
Another 12,800 job cut was announced by other top brands like Marks & Spencer, TM Lewin, Harrods, Arcadia, and Boots before the EWM Group.
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Major Restructuring by UK Fashion Companies Before the Second Wave
EWM Group, also known as Edinburgh Woollen Mill is one of the British fashion companies impacted by the Coronavirus-related lockdowns.
The company executives found the accelerated e-commerce sales made the situation worse for clothing brands in the UK.
Most of the job cuts by the retailers were actually announced before the second wave of the Coronavirus on British malls. The major restructuring was declared to save the companies from insolvency.
According to the experts, appointing administrators can protect the businesses against the creditors. However, sometimes this process can lead to a shutdown of the business.
Already, the economy of the UK is having difficulty in recovery since the global health crisis was created at the beginning of the year.
In August, UK GDP grew only 2.1% much lower compared to the expectations. Finance Minister Rishi Sunak announced additional support to recover the pandemic hit companies on Friday.
However, there were reports against the EWM group that the company failed to pay the suppliers in Bangladesh against the goods received.