Laura Ashley has filed for administration just a day after it said it was in ‘advanced talks’ over a 15 million pound lifeline and amid ongoing coronavirus concerns in the market.
On Monday, the British fashion and homeware retailer, which operates 150 stores in the UK, confirmed it was in talks with an unnamed third-party about a potential cash injection. But on Tuesday, it said it had hired advisers from accounting firm PwC as administrators, citing extra strain from the Covid-19 pandemic which had an “immediate and significant impact on trading.”
The retailer said in a statement: “Discussions with stakeholders have been ongoing and the directors are in advanced discussions for the provision of third-party debt funding. However, based on the company's revised cashflow forecasts and the increased uncertainty facing the group, the company expects that 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.”
It also said that its largest shareholder, MUI Asia Limited, was unable to provide financial support in the required timeframe.
Laura Ashley stops trading, files for administration
For the seven weeks to 13 March, the company reported a strong 27.7 percent year-on-year increase in total sales, while gross profit was up 22 percent.
But those results came against a broader backdrop of weak results from the company. For the 26 weeks to 31 December, its losses before tax widened by 166 percent to 4 million pounds compared to 1.5 million pounds the prior year. Total group sales during the year dropped by 10.8 percent to 109.6 million, while total like-for-like retail sales were down 10.4 percent.
In January, the company announced that its CEO and executive director Kwan Cheong Ng was stepping down from his role after eight years at its helm.
That came a few months after its finance director and joint chief operating officer, Seán Anglim, stepped down after 20 years at the company.
In 2018, Laura Ashley joined a growing list of UK businesses, including House of Fraser, New Look and Marks and Spencer, to announce it would be closing stores in an attempt to survive challenging retail conditions.
Photo courtesy of Laura Ashley