By guest author Sahar Nazir from Retail Gazette
- Laura Ashley is close to calling in administrators as it looks to Hilco Capital to secure a GBP 15 million lifeline
- 700 jobs are currently at risk
- Laura Ashley risks collapse by the end of the month
Laura Ashley is reportedly on the verge of calling in administrators by the end of March if it does not secure a GBP 15 million lifeline from Homebase owner Hilco Capital.
The clothing and home furnishings retailer is in talks with the former owner of HMV in a bid to secure the GBP 15 million, which could save 2700 jobs, Sky News reported.
Hilco Capital, which owns home improvement retailer Homebase, is reportedly in negotiations about the emergency loan.
Laura Ashley, which operates 150 stores in the UK, reportedly risks falling into administration by the end of the month if that loan is not secured.
Administrators are expected to be put on standby in the coming days.
On Friday, March 13, 2020, Laura Ashley said it was in discussions about the GBP15 million loan with an unspecified third-party to fund its immediate working capital requirements.
The retailer said it would need to “consider all appropriate options” if it is not able to secure the funding by the end of March.
It said its business has not been hugely impacted by the coronavirus outbreak, but said it was closely monitoring the situation as it could have a negative influence on trading.
Laura Ashley’s search for the funding comes after a “challenging year”.
In the 26 weeks to December 31, losses before tax ballooned by 166 % to GBP 4 million due to lower home furnishings sales and Brexit uncertainty.
Total group sales fell by 10.8 % to GBP 109.6 million, compared to the same period in 2018.
The retailer said disruption caused by the change in its Japanese franchise partner to Itochu Corporation also had an impact.
The company, which was valued at more than GBP 200 million when it floated during the 1980s, is now valued by the stock market at just GBP 10 million.
Its shares have slumped by more than 60 % during the last 12 months.