(Recasts, adds shareholder quotes, updates shares)
By Tanishaa Nadkar
Feb 19 (Reuters) - Clothing and furnishing retailer Laura
Ashley calmed concerns over its working capital, saying
it has access to sufficient funds to meet immediate funding
needs, sending its shares up more than 15%.
The company is among a growing band of British retailers to
encounter difficulties over the past few years, with falling
sales leading to store closures while it also contends with
weakness in its home furnishings business.
Lender Wells Fargo and the retailer's majority
shareholder, MUI Asia Limited, have concluded discussions over
Laura Ashley's immediate funding needs, the retailer said on
Wednesday, and that it can draw requisite funds from its
existing working capital facility with the bank.
The arrangements do not involve a cash injection by MUI
Asia, the company reiterated.
The announcement comes days after Laura Ashley said that
recent movements in its stock and customer deposit levels had
led to a reduction in the amount it could draw under the Wells
Fargo facility.
Wells Fargo provided Laura Ashley with a 20 million pound
($26 million) last year, with the company's assets as
collateral.
Laura Ashley shares were up 15.2% at 2.4 pence by 1611 GMT.
However, Cavendish Asset Management, its third-largest
shareholder with a 1.7% stake, raised some concerns.
"It's good news for the company in the short term, but it
might not hold up for long," said Cavendish fund manager Nick
Burchett.
Burchett said that the company needs to focus on its vintage
styles and luxury image now it has breathing room provided by
the funding arrangement.
"Otherwise it could be curtains for another well-known high
street name," he added.
($1 = 0.7699 pounds)
(Reporting by Tanishaa Nadkar in Bengaluru
Additional reporting by Indranil Sarkar
Editing by Shinjini Ganguli and David Goodman)
