Popular clothing chain Edinburgh Edinburgh Woollen Mill (EWM) is on the brink of insolvency - which puts 24,000 jobs at risk.

The company, which also owns Peacocks and Jaeger, is close to collapse and lodged a notice of intention to appoint administrators, according to documents filed with the High Court.

Staff received warning this morning that national and local lockdown restrictions had left the business struggling.

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The company added that it has been hit hard by allegations, which it denies, that the retailer and several rivals failed to pay some Bangladeshi suppliers during lockdown in an attempt to cut costs for clothes they were unlikely to sell.

Insolvency specialists at FRP will spend 10 days carrying out an urgen 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.

EWM chief executive Steve Simpson 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, EWM 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.

HeraldScotland:

“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.”

An FRP spokesman said: “Our team is working with the directors of a number of the Edinburgh Woollen Mill Group subsidiaries to explore all options for the future of its retail brands Edinburgh Woollen Mill, Jaeger, Ponden Home, and Peacocks.”

Chancellor Rishi Sunak is expected to unveil new plans for protecting jobs and businesses hit by the second wave and new measures.

The announcement will come as new figures showed the pace of the UK’s economic recovery has slowed considerably, with GDP up 2.1% in August, less than half of what experts had expected