Laura Ashley’s owners have filed an intention to appoint administrators and have suspended trading, blaming the coronavirus pandemic for a “significant” impact on trading.
In a note on the London Stock Exchange, Laura Ashley said it would no longer be able to continue to afford to borrow from its lenders and its majority owner MUI would be “unable to provide financial support in the required timeframe”.
As a result, the retailer said it had appointed Robert Lewis and Zelf Hussain as administrators.
The retailer said in the seven weeks trading to March 13, it had seen sales improve 24% year on year; however, coronavirus’ effect on trading had in turn massively reduced the business’ cash flow and forced it to wind up.
Laura Ashley said, should the administration go ahead, it was “not certain whether there would be any surplus assets available” for shareholders.
At the end of February, the retailer said it had agreed a £20m loan from Wells Fargo and had replaced former chief executive Kwan Cheong Ng with Katharine Poulter.
It caps what has been an extended period of hardship for the fashion and homewares brand, which reported losses of £4m before tax for the 26 weeks to December 31, 2019.
The news comes on the same day Dixons Carphone said it would be closing all of its 531 standalone Carphone Warehouse stores with the loss of up to 2,900 jobs.
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