The fashion to homewares retailer Laura Ashley is set to become the first retail casualty of the coronavirus crisis, placing 2,700 jobs at risk.
Sky News had reported at the weekend how it was scrambling for a funding lifeline to avert collapse but the company all but admitted defeat on Tuesday saying it had filed intentions to appoint administrators.
It announced the decision hours after Dixons Carphone said it was to close all its Carphone Warehouse stores in the UK with the loss of 2,900 workers.
Dixons Carphone said its decision was not related to the COVID-19 outbreak.
Laura Ashley, however, blamed its troubles on a significant drop-off in trade with no prospect of an end to the coronavirus crisis in sight.
The company confirmed its majority shareholder and third party lenders had been unable to provide additional support.
It had been seeking a £15m loan.
Its statement said: Based on the company’s revised cashflow forecasts and the increased uncertainty facing the group, the company expects that it will not be in a position to draw down additional funds from third party lenders in a timely manner sufficient to support working capital requirements.
It added: The directors of the company, its key trading subsidiary (Laura Ashley Limited), Premier Home Logistics Limited, Laura Ashley Investments Limited, and Texplan Manufacturing Limited, have concluded that all available alternative options have been explored and therefore, in order to protect creditors, it is necessary to file a notice of intention to appoint administrators in respect of the company and each of the named subsidiaries.
Laura Ashley shares were trading 96% down. The company has requested a suspension of its listing.
The coronavirus crisis builds on a tough few years for the high street following a slump in consumer confidence coupled with a surge in costs from things such as business rates, rents and rising minimum wage demands.
It has forced a string of chains to collapse while others, including even Sir Philip Green’s Topshop empire, have secured rescue deals with creditors including landlords.
Retail is among UK sectors pleading for financial help as the economy grinds to a halt during the unprecedented public health emergency.
The Chancellor Rishi Sunak is expected to build on measures in the Budget in support of businesses later on Tuesday by extending help to ease the burden
(c) Sky News 2020: Coronavirus: Laura Ashley set to become first retail casualty of crisis