(Adds details on funding arrangements, outlook, chairman quote,
background)
Feb 17 (Reuters) - Clothing and furnishing retailer Laura
Ashley said on Monday its main banking lender and
majority shareholder were in talks regarding the company's
immediate funding needs, as it reported a drop in half-year
revenue.
The fashion house, a favourite of Princess Diana in its
1980s heyday, is the latest victim of a troubled couple of years
for British retailers, its sales hit by store closures, weakness
in its home furnishings business and a worsening consumer mood.
The company said on Monday recent movements in its stock and
customer deposit levels had led to a reduction in the amount it
can draw down under the working capital facility with U.S. bank
Wells Fargo & Co.
The lender provided an asset-based loan of 20 million pounds
to Laura Ashley last year, using the company's assets as
collateral.
The bank and Laura Ashley's majority shareholder MUI Asia
Ltd are discussing arrangements that will let the retailer use
funds from the facility for immediate requirements, and to draw
down additional amounts to meet ongoing working capital needs in
the short to medium term.
The arrangements do not involve a cash injection by MUI Asia
Ltd, the company said.
"If the Group remains unable to access the requisite level
of funding, then the Company will need to consider all
appropriate options," it said.
Laura Ashley's total group sales fell 10.8% to 109.6 million
pounds ($142.89 million) in the six months ended Dec. 31. It
said sales were flat for the first seven weeks this year.
Interim results for the 6 months ending Dec. 31 will be
published on Thursday.
Chairman Andrew Khoo said that recent trading conditions had
been challenging but that there was a robust plan in place to
turn the business around.
"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," he said.
"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."
($1 = 0.7670 pounds)
(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Aditya
Soni and Patrick Graham)
