The high street fashion and furnishing name, Laura Ashley is to file for administration, having failed to secure a £15m emergency loan to keep the firm from collapse.
Laura Ashley operates more than 150 British stores and employs some 2,700 people. It has stated that rescue plans for the high street name had failed due to the coronavirus outbreak.
In a statement, it said: “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.
“Discussions with stakeholders have been ongoing and the directors are in advanced discussions for the provisions 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 Limited – the investment company that controls Laura Ashley – has confirmed that it is unable to provide financial support in the required timeframe.”
The retailer said it intended to appoint Robert Lewis and Zelf Hussain from the accounting firm PwC as administrators to Laura Ashley and its subsidiaries, Premier Home Logistics, Laura Ashley Investments, and Texplan Manufacturing.
Four weeks ago Laura Ashley narrowly avoided collapse after agreeing an emergency deal with its main lender, the US band Wells Fargo. It then announced new plans to revive the ‘timeless’ designs of its late founder in an attempt to breathe new life into the heritage brand.
On Friday, Laura Ashley said it had “not yet seen a significant financial impact due to Covid-19” but did warn that the virus had “the potential to negatively influence future trading as a result of reduced footfall.”