- Huw Hughes
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Laura Ashley has published a trading update reporting flat sales in the
first seven weeks of the year and has said it would “consider all
appropriate options” if it is unable to secure the additional funding it is
currently seeking.
The British fashion and homeware retailer has confirmed that its
majority shareholder MUI Asia Limited is in talks with Wells Fargo to
“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.”
The arrangements would not involve a cash injection by MUI Asia Limited,
the retailer said.
“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,” the company added.
The retailer continues to face “challenging” trading. For the 26 weeks
to 31 December 2019, total group sales were down 10.8 percent to 109.6
million pounds compared to 122.9 million pounds for the same period the
previous year. The company said the drop 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.
However, the company said the development of its turnaround strategy is
“well advanced” and, despite its execution remaining at an early stage,
said its management team is “encouraged by the early signs.” Sales at the
retailer were flat for the first 7 weeks of trading this year.
Laura Ashley expects to announce its interim results for the 6 months
ending 31 December 2019 on Thursday 20 February.
Last month, Laura Ashley announced that Kwan Cheong Ng would be stepping
down from his role as CEO and executive director of the company after eight
years at its helm. He will remain in the position until 30 April, after
which he will stay on the company’s board as a non-executive director. Chief
operating officer Katharine Poulter has been appointed executive director
and will replace Ng as CEO with effect from 1 May.
Andrew Khoo, chairman, said in a statement: “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 the execution of the transformation plan.”
Photo credit: Laura Ashley, Facebook
