Laura Ashley to appoint administrators
Laura Ashley is to appoint administrators after coronavirus fears hit trading and its cashflow.
‘Further to the company's announcement on 13 March, the company has continued to closely monitor the impact of the COVID-19 outbreak and has reviewed its immediate cashflow forecasts. For the seven weeks up to 13 March, trading for the Laura Ashley business improved by 24% year-on-year and the directors were encouraged by this strong performance. However, the COVID-19 outbreak has had an immediate and significant impact on trading,’ it told shareholders.
‘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 [the majority shareholder] has confirmed that it is unable to provide financial support in the required timeframe.
‘The directors of the company [and] its key trading subsidiaries have concluded that all available alternative options have been explored and therefore, in order to protect creditors, it is necessary to file a notice of intention to appoint administrators in respect of the company and each of the named subsidiaries.
‘Accordingly, 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.’
The chain had previously warned on needed to borrow £15m by the end of the month if it was to survive.