Laura Ashley’s UK business has been placed into administration after realizing that even if it could secure funds from a third-party investor it would be too late to save the business.
the Malaysian-controlled retailer of clothing and homewares was in negotiations with Hillco Capital in a bid to secure a £15 million emergency loan.
In a statement reported by Retail Gazette, Laura Ashley said its “revised cash flow forecasts and increased uncertainty” mean it would not be able to secure those funds in sufficient time. The coronavirus, it said, “had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation”.
Laura Ashley’s UK business employs 2700 staff across the UK where it operates 150 stores. The immediate consequences for Asian stores is not yet clear.
Amy Higginbotham, a retail analyst at GlobalData, said while the company was blaming poor recent trading in part on the coronavirus outbreak, the retailer has been struggling for a while.
“The brand has long been tired and has struggled to regain relevance in both its fashion and home divisions. Financially weak retailers, of which there are many, are likely to follow Laura Ashley into administration given the current crisis. Those retailing non-essential purchases that can easily be deferred will be particularly badly hit,” she said.
All that aside, Laura Ashley’s UK business has reported a 24-per-cent increase in sales in the seven weeks to March 13.