Clothing retailer Edinburgh Woollen Mill is to acquire two thirds of discount clothing retailer Peacocks stores, in a deal which will see 6,000 jobs saved, Peacocks' administrators KPMG said on Wednesday.
The administrators said in a statement that Edinburgh Woollen Mill agreed to buy 388 stores from Cardiff-headquartered Peacocks, but the other 224 stores would be closed immediately, leading to 3,100 redundancies.
Peacocks called administrators in and was put up for sale in January after succumbing to falling sales and high debts.
British shoppers' disposable incomes have been squeezed by rising prices, muted wage growth and government austerity measures, prompting a flurry of retail casualties as store chains faced tough trading conditions in the run-up to Christmas.
Peacocks failed to come to an agreement with its main lenders, Royal Bank of Scotland and Barclays, to restructure its 240 million pounds of debt.
A strong brand presence and loyal customer following meant that Peacocks attracted a great deal of interest from both trade and private equity bidders, leading to today's successful sale, KMPG's Chris Laverty said.
Private equity firm Sun European Partners last month bought another value retailer, Bonmarche, also from administrators KMPG. Peacocks was the previous owner of Bonmarche.
(Reporting by Sarah Young; Editing by Hans-Juergen Peters)