(Alliance News) - Laura Ashley Holdings PLC on Monday said it will consider all options as it noted that it is in advanced discussions to secure additional funding.
The shares plunged 45% lower on Monday morning in London, trading at 0.71 pence each.
Back in February, the clothing and homeware retailer had said recent movement in store stock and customer deposit levels had resulted in a reduction to the amount it could withdraw from its bank facility with lender Wells Fargo, leading to financing discussions. Laura Ashley had added that the discussions with Wells Fargo and major shareholder MUI Asia Ltd had resulted in it securing approval to utilise funds from its working capital facility with Wells Fargo to meet immediate requirements.
However on Monday, Laura Ashley said it has found that it will need further funding to meet its working capital requirements, adding that MUI Asia has confirmed it will consider providing an additional GBP10 million to the company. Laura Ashley said it also is in advanced discussions with a third-party lender to provide facilities of up to GBP15 million.
"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 appropriate options," Laura Ashley said.
For the six months to the end of 2019, the retailer posted a pretax loss of GBP4.0 million on revenue of GBP109.6 million.
For the six weeks to March 7, total sales was up 28% ahead of the comparative period in 2019 with gross profit up 22%, Laura Ashley said, adding that the Covid-19 outbreak has not financially hurt the company.
Separately, Chan Choung Yau has been hired as a non-executive director. He is currently group executive director of the MUI Group.
Jane Rapley and Leon Yee have resigned from their roles of independent non-executive directors. Rapley and Yee both joined the company in 2018.
By Ife Taiwo; ifetaiwo@alliancenews.com
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