Embattled home and fashion retailer Laura Ashley has fallen into administration after it revealed that the coronavirus outbreak has had an “immediate and significant impact on trading”.
The company revealed that, while trading had improved by 24% year-on-year for the seven weeks up to 13 March, as well as directors being “encouraged” by this strong performance, the Covid-19 outbreak has put a stop to the positive trading.
It added that based on the company’s revised cashflow forecasts and the increased uncertainty facing the group, 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”.
Its lenders, MUI Asia Limited, has confirmed that it is unable to provide financial support in the required timeframe.
Laura Ashley said that “all available alternative options have been explored” and therefore, in order to protect creditors, it saw it as “necessary” to file a notice of intention to appoint administrators.
The company has named Robert Lewis and Zelf Hussain of PwC as administrators.
In a statement it said: “The company regrets to announce that the directors of the company, and of the named subsidiaries, have today filed notices of intention to appoint Robert Lewis and Zelf Hussain as administrators.
“If administrators are appointed in respect of the company, given the group’s creditor position, the company is not certain whether there would be any surplus assets available to shareholders of the company.”