High-street fashion chain Edinburgh Woollen Mill, which owns Peacocks and Jaeger, is close to collapse, with 24,000 jobs in the balance.
The company, which recently relocated its headquarters from Langholm to Carlisle, lodged a notice of intention to appoint administrators to look for potential buyers.
Bosses wrote to staff on Friday morning. They say, like so many other brand names, it has been hit hard by falling footfall in town centres during the coronavirus pandemic.
The move Edinburgh Woollen Mill, owned by businessman Philip Day, will see insolvency specialists at FRP spend ten days carrying out an urgent review ahead of further action.
All stores will continue trading and further details will be announced in due course, the company added, but significant changes are expected.
Steve Simpson, chief executive of the EWM group said: “Like every retailer, we have found the past seven months extremely difficult.
“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.
“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."
He went on: “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.
“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.”