Up to 2,700 jobs at risk after Laura Ashley falls into administration
Fashion chain Laura Ashley has filed for administration, putting up to 2,700 jobs at risk, after rescue talks were halted by the coronavirus outbreak.
The troubled retailer had been in talks with stakeholders over refinancing, but it said its "revised cash flow forecasts and increased uncertainty" mean it will not be able to secure these funds in sufficient time.
It said it hired advisers from PwC to oversee the administration on Tuesday.
The company has a large store in Vastre Enterprise Park in Newtown as well as stores in Shrewsbury, Telford, Birmingham, Sutton Coldfield and Wolverhampton.
Laura Ashley's first shop was opened where she lived in Machynlleth, Powys, in 1961, named Ashley Mountney, and Shrewsbury was home to one of the first stores under the Laura Ashley name in 1970.
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."
Laura Ashley said it had seen an upturn in sales in recent weeks, with trading up 24 per cent year-on-year for the seven weeks to March 13.
However, it said the virus outbreak has "had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation".
The retailer operates 150 stores in the UK and employs around 2,700 staff.
Councillor David Selby, mayor of Newtown, said: “Laura Ashley as a company is the reason I am in Newtown. I moved to the area in 1988 when I started working in the mail order department on the Vastre estate in Newtown. I worked for the company for 17 years through good and bad trading times, but the spirit of what once a family company remained. There are many families here that have a connection to Laura Ashley, who will be saddened by this news.
“I feel for those who currently work for the company who will be directly affected by the news, particularly when we are living in such uncertain times. I hope and trust that some sort of solution can be found for the company to keep vital jobs in our town.”
The coronavirus crisis builds on a tough few years for the high street following a slump in consumer confidence coupled with a surge in costs from things such as business rates, rents and rising minimum wage demands.
It has forced a string of chains to collapse while others, including even Sir Philip Green's Topshop empire, have secured rescue deals with creditors including landlords.
Retail is among UK sectors pleading for financial help as the economy grinds to a halt during the unprecedented public health emergency.
