Lifeline talks shelved as a result of covid-19 outbreak
Laura Ashley has filed for administration, making it the first UK retail casualty to be impacted by the coronavirus crisis.
The lifestyle and fashion retailer had reportedly been in talks with Hillco Capital, the parent company of Homebase, to secure a £15m emergency loan, along with an unspecified third-party to fund its immediate working capital requirements.
MUI Asia Limited, the investment company that controls Laura Ashley, has confirmed that it is unable to provide financial support in the required time frame, putting 2,700 jobs at risk.
The retailer, which has 150 stores in the UK, has hired advisers from PwC to oversee the administration.
Laura Ashley said: “The Covid-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation.
“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.”
