As well as the Edinburgh Woollen Mill clothing chain, the deal will cover fashion retailer Bonmarché, and Ponden homeware outlets © Jeff J Mitchell/Getty

A longtime associate of Philip Day has taken over the running of the retail tycoon’s Bonmarché, Edinburgh Woollen Mill and Ponden homeware chains as part of a deal rescuing up to 2,500 jobs out of administration.

The three brands were sold on Tuesday to a group of Asian investors which, according to one person close to Mr Day, will inject a sum in the “tens of millions” into the new company.

Mr Day was initially considering buying some of his former companies out of administration but chose instead to back the sale to the investors. The new company, which will be led by retailer Stephen Simpson, will keep the current management team, including Mr Day’s daughter Lauren.

Mr Day has retained influence over the outcome of the administration as EWM Group, the ultimate holding company of his former retail empire, is a secured creditor.

The new owners will pay an undisclosed sum in instalments over the next five years to EWM Group, depending on performance and cash availability.

“[Philip Day] just wants to get off the stage, having lost so much of his fortune,” said one of his close associates.

But the retailer was likely to stay close to Mr Simpson and management, the person added.

The sale will keep roughly 300 stores open but administrators for Edinburgh Woollen Mill and Ponden said that nearly 500 employees had been made redundant with more than 100 stores permanently closed.

“We regret that not all of Edinburgh Woollen Mill and Ponden Home could be rescued,” said FRP, which ran the administration process for the two brands. The firm noted that the deal had “resulted in a significant number of redundancies at a particularly challenging time of year and period of economic uncertainty”.

Jaeger on Monday became the first of Mr Day’s former businesses to secure a new owner, as Marks and Spencer announced it was set to acquire the upmarket womenswear brand for an undisclosed amount. FRP is still in talks with potential bidders over Peacocks.

The fashion brands under EWM fell into administration late last year when Mr Day failed to find new buyers willing to invest. Mr Day acquired the Edinburgh Woollen Mill knitwear and homeware business in 2002 and used it as a base to snap up struggling brands such as Peacocks and Bonmarché.

It is now one of a number of UK retailers looking for buyers after collapsing during the pandemic.

Philip Green’s Arcadia, which entered administration shortly after the four EWM companies, is also looking to attract bidders, with administrators Deloitte setting a deadline of January 18 for offers. Next, Boohoo, Frasers Group, US-based Authentic Brands and Hong Kong’s Shein are all believed to be interested in Topshop/Topman, which is considered the best asset.

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