Struggling UK fashion retailer Laura Ashley has appointed PwC as administrators after rescue talks were abandoned due to the Coronavirus epidemic.
For the seven weeks up to 13th March, trading for the Laura Ashley business improved by 24% year-on-year and the company said it was encouraged by this strong performance while holding advanced discussions for the provision of third-party debt funding.
However, the company’s potential backers backed off following the virus outbreak.
‘Based on the company's revised cashflow forecasts and the increased uncertainty linked to the Covid-19 outbreak, 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,’ it said in a statement.
‘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.’
Main shareholder, MUI Asia Limited has confirmed that it is unable to provide financial support in the required timeframe.