Wed, 18 Mar 2020 | ADMINISTRATION
Home furnishings and fashion retailer Laura Ashley has filed for administration after the impact of coronavirus meant it failed to secure funding.
Talks over the retail group securing funding to continue trading had been at an advanced stage, following reports in February that it was seeking an emergency £15 million load (eventually agreeing an emergency deal with Wells Fargo) and it had seen improved business recently.
For the six weeks to March 7, Laura Ashley’s sales were up 27.7 per cent on the same period a year before, while gross profit was up 22.2 per cent on the same period.
However, the coronavirus outbreak “has had an immediate and significant impact on trading” and that, government advice suggests “that this will be a sustained national situation”. Regarding funding, the group said “it will not be in a position to draw down additional funds from third party lenders in a timely manner sufficient to support working capital requirements”.
Laura Ashley’s majority shareholder MUI Asia has said it is unable to provide financial support and, as a result, the company has appointed PwC partners Zelf Hussain and Robert Lewis as joint administrators.
The notice of intent gives the retailer 10 working days’ protection from creditors while the administration is undertaken.
In 2019, Laura Ashley reported annual losses of £9.8 million before tax, while its same-store sales were doen 10 per cent for the half-year to December 31 2019. In its most recent full accounts, to the year ending June 30 2018, the company reported net assets amounting to £84 million.
The company operates 153 stores across the UK and has overseas concessions, employing around 2,700 staff.
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