Edinburgh Woollen Mill Group, which owns Peacocks and Jaeger, is on the brink of collapse after it filed a notice to appoint administrators, affecting around 24,000 workers.
Steve Simpson, chief executive of the high street giant said the past seven months have been “extremely difficult” for the company.
He took aim at a trade organisation which claimed that EWM has not paid its suppliers in Bangladesh.
“This situation has grown worse in recent weeks as we have had to deal with a series of false rumours about our payments and trading which have impacted our credit insurance,” Mr Simpson said.
Earlier this week, EWM warned that a potential takeover of Peacocks had been threatened because of allegations circulated by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
BGMEA claimed that EWM had £27m of unpaid bills with suppliers, a claim which the group denies.
Mr Simpson said: "Traditionally, the group has always traded with strong cash reserves and a conservative balance sheet but these stories, the reduction in credit insurance – against the backdrop of the lockdown – and now this second wave of Covid-19 and all the local lockdowns, have made normal trading impossible.
Insolvency practitioners FRP are carrying out an urgent review before taking further action. The group’s stores will continue trading and further details will be announced in due course.
“As directors we have a duty to the business, our staff, our customers and our creditors to find the very best solution in this brutal environment,” Mr Simpson said.
"So we have applied to court today for a short breathing space to assess our options before moving to appoint administrators.
"Through this process I hope and believe we will be able to secure the best future for our businesses, but there will inevitably be significant cuts and closures as we work our way through this.
"I would like to thank all our staff for their amazing efforts during this time and also our customers who have remained so loyal and committed to our brands."
