Laura Ashley seeks fresh capital to meet funding requirements
Fashion and homewares retailer Laura Ashley is in talks with its lender as it looks to secure new funds to keep on trading.
In a statement, Laura Ashley said trading in its current financial year has continued to be challenging. There was a 10.8% fall in total group sales in the 26 weeks to 31 December, which the retailer attributed to market headwinds and weaker consumer spending on big ticket items.
Laura Ashley also said that recent movements in its stock and customer deposit levels have led to a reduction in the amount it can draw down under its working capital facility with its lender Wells Fargo. As a result, Wells Fargo and the company’s majority shareholder MUI Asia are now seeking a way for the retailer to secure enough cash to meet its immediate funding requirements. Laura Ashley is also looking to draw down additional amounts to meet ongoing working capital needs in the short to medium term.
Despite this, the retailer said it is making good progress with its turnaround strategy, although it is still at an early stage. Sales were flat for the first seven weeks of trading this year.
Andrew Khoo, Laura Ashley chairman, said: “We acknowledge that recent trading conditions, in line with the overall UK retail market, have indeed been challenging. There is however a robust plan in place to turn the business around and the board of directors is confident and optimistic that the recent appointment of Katharine Poulter will enable the business to execute this broad-based strategy. The major shareholders have indicated their continued confidence in the business and are fully supportive of the management team and execution of the transformation plan.”
