LONDON — Already struggling with cash flow and troubles on the high street, Laura Ashley has declared insolvency, blaming coronavirus for its failure.
On Tuesday, the company said that despite a 24 percent year-on-year uptick in sales in the seven weeks to March 13, the spread of COVID-19 has changed everything.
“It has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation,” the company said in a statement to the London Stock Exchange.
It said that directors had been in advanced discussions for the provision of third-party debt funding, but based on revised cashflow forecasts and the increased uncertainty facing the group, Laura Ashley 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.
Parent company MUI Asia Limited, which is owned by the Malaysian Chinese businessman Khoo Kay Peng, has confirmed it is unable to provide financial support in the required timeframe.
The company directors and affiliates said all available alternative options have been explored, so in order to protect creditors, it has called in administrators Robert Lewis and Zelf Hussain and suspended trading on the London Stock Exchange.
The statement said Laura Ashley is not certain whether there would be any surplus assets available to shareholders of the company. Founded by Laura and David Ashley, the retail brand rose to great heights in the Eighties, with a generation of Sloane Rangers and the then-Lady Diana Spencer wearing its quintessentially English frills, flower prints and fresh floral fragrances.
But as Nineties minimalism, grunge and urban chic took over it fell out of fashion, and never recovered. Over the years, the business put the focus on home furnishings and a small amount of apparel and accessories, and had long struggled under MUI.
Last month, Laura Ashley named Katharine Poulter, the company’s chief operating officer to the role of executive director and chief executive officer. A retail veteran, she had been spearheading a strategic review of the business.
She succeeded Kwan Cheong Ng, who retired as ceo. Ng was to become a non-executive director of the board as of April 30.