The company, which owns Peacocks and Jaeger, has lodged a notice of intention to appoint administrators to look for potential buyers to shore up the struggling business.
Bosses wrote to staff on Friday morning, warning them that the national and local lockdowns had hit sales very heavily.
There are EWM stores and outlets across the region including in Shrewsbury, Ludlow, Welshpool, Bridgnorth, Shipley, Newport, Oswestry, Walsall, Codsall, Gailey and Birmingham.
There are also Peacocks and Jaeger stores and outlets right across the region.
Peacocks has sites in Wolverhampton city centre and at Bentley Bridge, Bilston, Dudley, Cannock, West Bromwich, Stourbridge, Smethwick and Perry Barr, as well as Donnington, two in Shrewsbury – including Dobbies – and Market Drayton.
Jaeger can be found at Boundary Mill retial outlet in Walsall and Birmingham, and at Cheshire Oaks in Ellesmere Port.
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.
The move by EWM, owned by businessman Philip Day, will see insolvency specialists at FRP spend 10 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.
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.
"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."
The move came just hours before Chancellor Rishi Sunak was expected to unveil new plans for protecting jobs and businesses hit by the second wave and new measures.