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Laura Ashley seeks ?15m lifeline despite sales jump
16th Mar 2020 13:43
(Sharecast News) - Home furnishing retailer Laura Ashley said crucial funding discussions were still ongoing, as it posted a 28% jump in sales but warned of a possible hit going forward from the coronavirus outbreak.
Updating the market on trading, the retailer said total sales were up 27.7% in the six weeks to 7 March year-on-year, while gross profit was ahead of management expectations, up 22.2%. It did not provide a like-for-like sales figure.
However, it warned that the coronavirus outbreak was likely to impact sales going forward: "While the company has not yet seen a significant financial impact due to Covid-19, the company believes that it has the potential to negatively influence future trading as a result of a reduced footfall and continues to monitor the situation closely."
In February, Laura Ashley - which has around 150 British stores and employs 2,700 people - revealed it was in emergency discussions with lenders after being rocked by "market headwinds and weaker consumer spending".
On Monday, Laura Ashley said it was in "advanced discussions" with an unnamed third-party lender to provide facilities of up to ?15m "to meet the group's working capital requirements".
It continued: "If the group is unable to secure commitment for the requisite level of funding by the end of March to satisfy its ongoing working capital requirements and turnaround plan, then the company will need to consider all options."
According to Sky News - which said Laura Ashley was in loan talks with Hilco Capital, which specialises in distressed retailers - that could include calling in administrators.
Laura Ashley is listed on the London Stock Exchange but is controlled by Malaysian conglomerate MUI Asia. Laura Ashley said it was engaging "proactively" with its key stakeholders and that MUI was "continuing to actively consider the provision of an additional ?10m facility to further support the company proposed turnaround plan".
Shares in Laura Ashley were down 8% at 1.20p by 1330 GMT.
Updating the market on trading, the retailer said total sales were up 27.7% in the six weeks to 7 March year-on-year, while gross profit was ahead of management expectations, up 22.2%. It did not provide a like-for-like sales figure.
However, it warned that the coronavirus outbreak was likely to impact sales going forward: "While the company has not yet seen a significant financial impact due to Covid-19, the company believes that it has the potential to negatively influence future trading as a result of a reduced footfall and continues to monitor the situation closely."
In February, Laura Ashley - which has around 150 British stores and employs 2,700 people - revealed it was in emergency discussions with lenders after being rocked by "market headwinds and weaker consumer spending".
On Monday, Laura Ashley said it was in "advanced discussions" with an unnamed third-party lender to provide facilities of up to ?15m "to meet the group's working capital requirements".
It continued: "If the group is unable to secure commitment for the requisite level of funding by the end of March to satisfy its ongoing working capital requirements and turnaround plan, then the company will need to consider all options."
According to Sky News - which said Laura Ashley was in loan talks with Hilco Capital, which specialises in distressed retailers - that could include calling in administrators.
Laura Ashley is listed on the London Stock Exchange but is controlled by Malaysian conglomerate MUI Asia. Laura Ashley said it was engaging "proactively" with its key stakeholders and that MUI was "continuing to actively consider the provision of an additional ?10m facility to further support the company proposed turnaround plan".
Shares in Laura Ashley were down 8% at 1.20p by 1330 GMT.