British fashion and homeware retailer Laura Ashley has announced that it will be filing for administration as a result of the ongoing coronavirus outbreak. This decision puts approximately 2,700 jobs at risk. Just a day before, the company had been in talks for emergency funding and had reported an improvement in sales. However, the impact of the COVID-19 pandemic on retail has been immediate and significant, leading to the decision to seek administration.
Despite reporting a rise in trading in the six weeks leading up to March 7, with double-digit growth, Laura Ashley quickly saw the situation change due to the coronavirus outbreak. Ongoing developments indicate that the current situation will continue for some time, prompting the company to seek administration.
In a similar vein, Dixons Carphone has also announced the closure of all its standalone Carphone Warehouse stores, potentially resulting in the loss of 2,900 jobs. While Dixons Carphone did not explicitly blame the coronavirus outbreak for its decision, Laura Ashley directly attributed its downfall to the ongoing pandemic.
Struggling retailers face a challenge as footfall in stores decreases and general shopping activity slows down. The impact of the COVID-19 pandemic makes it unlikely for these retailers to recover in the coming months.
Laura Ashley had been trying to secure £15 million in emergency funding to stay afloat, but its majority owner, MUI Asia, was reluctant to provide the additional funds. The company’s attempts to secure a loan from other sources also failed. Both the owners and potential lenders lost confidence in Laura Ashley’s ability to turn around its performance in the current retail environment.
However, there is a possibility that Laura Ashley may not completely vanish from the high street. While it will no longer be listed on the London Stock Exchange, the company could potentially be acquired by another retailer or a private equity buyer with the aim of revitalizing it.
Overall, the COVID-19 outbreak has dealt a final blow to Laura Ashley, resulting in its decision to file for administration. The impact of the pandemic on retail businesses, particularly those that were already struggling, cannot be denied. The high street continues to face challenges, and only time will reveal how these businesses navigate through this difficult period.
Here are two useful links for further information on the topic:
1. BBC: Laura Ashley files for administration
2. Retail Gazette: Laura Ashley shuts down after 67 years of trading