Edinburgh Woollen Mill is likely to seek a 10-day extension of protection from creditors as the owners seek to save as much of the business as they can.

The impact of the new lockdown in Wales, where the group’s Peacocks business is headquartered and there are two distribution centres, has added complexity to attempts to salvage the business. 

That, combined with realistic prospects of a deal as tycoon Philip Day continues talks with potential backers, is expected to lead to a request for more time.

The Edinburgh Woollen Mill Group, which also owns brands including Jaeger as well as the eponymous chain, filed an intention to appoint administrators at the High Court earlier this month, after trade was hit during the pandemic. The period of protection provided expires tomorrow.

A source familiar with the situation believed it likely an extension would be requested, partly to take account of the impact of the Welsh lockdown. 

It is understood that Day sees a brighter future for Peacocks than for the Edinburgh Woollen Mill business, which is highly reliant on tourists and older shoppers – both groups that have stayed away during the pandemic. 

Day is thought to be in talks with US hedge fund Davidson Kempner to acquire Peacocks, probably out of administration. The 260-store Edinburgh Woollen Mill chain would likely be shut, however.

As many as 21,500 jobs are at risk as Edinburgh Woollen Mill teeters on the brink. The group has approximately 1,100 stores. Around 50 Peacocks and Edinburgh Woollen Mill branches were shut last week, with the loss of about 600 jobs.