Laura Ashley has announced its intention to appoint administrators and suspend trading, having reviewed its cashflow forecasts in light of the Covid-19 outbreak.
For the seven weeks to 13th March, trading improved by +24% YoY and Laura Ashley's directors were encouraged by this strong performance – yet report that the 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. MUI Asia Ltd has confirmed that it is unable to provide financial support in the required timeframe."
PwC 's Robert Lewis and Zelf Hussain have been appointed as administrators.
Nigel Frith, a senior market analyst at www.asktraders.com, comments: "The increasingly more stringent measures being advised by the UK Government to prevent the spread of coronavirus are threatening the survival of the retail sector. Social distancing, isolation and quarantine mean quite simply that consumption has seen a very sharp deep decline.
"The UK retail sector was in a bad place even before coronavirus arrived to the UK. This will be the final nail in the coffin for many retailers. And we are by no means just taking about smaller retailers. The Government must act now or this sector, which is responsible for many thousands of jobs will struggle to survive and Laura Ashley will just be the first of many."