Over the weekend, it was reported that the Malaysian owner of Laura Ashley was in crisis talks over the need to secure emergency funding to keep the business afloat.
On Sunday, Laura Ashley Holdings PLC (the “Company”) and its subsidiaries, (the “Group”) published a statement regarding the speculation regarding its financial position.
Text from the statement follows:
Trading during the current financial year has continued to be challenging. For the 26 weeks to 31 December 2019, total Group sales were £109.6m (H1 2018: £122.9m), a fall of 10.8%. The decline in total revenue was due to the market headwinds and weaker consumer spending during the period, which led to a decline in sales of bigger ticket items.
Recent movements in the Group’s stock and customer deposit levels have led to a reduction in the amount that the Group can draw down under its working capital facility with Wells Fargo, the lender to the Group. The Company confirms that Wells Fargo and the Company’s majority shareholder MUI Asia Limited, are discussing arrangements that will allow the Group to utilise sufficient funds from the Wells Fargo facility to meet the Group’s immediate funding requirements and to draw down additional amounts to meet ongoing working capital needs for the Group in the short to medium term. These arrangements do not involve a cash injection by MUI Asia Limited into the Group.
The Company welcomes the discussions between MUI Asia Limited and Wells Fargo and is proactively monitoring the situation closely. If the Group remains unable to access the requisite level of funding, then the Company will need to consider all appropriate options.
In addition to the discussions between MUI Asia Limited and Wells Fargo, the Company is well advanced in developing its turnaround strategy, the execution of which remains at an early stage, but the management team is encouraged by the early signs. Sales were flat for the first 7 weeks of trading this year.
The Company expects to announce its interim results for the 6 months ending 31 December 2019 on Thursday 20 February
Andrew Khoo, Chairman, commented:
“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.”
“For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Sagar Mavani, Chief Financial Officer.”
Last month, it was confirmed that Katharine Poulter would take over as CEO from Mr Kwan Cheong Ng, in April 2020.
Source : Insight DIY & Laura Ashley Group