17th Feb 2020 08:42
(Alliance News) - Shares in Laura Ashley Holdings PLC dived on Monday after it said trading in its current financial year ending June 30 has been challenging, heaping more pressure on the retailer's already precarious finances.
The shares were trading 34% lower at 2.14 pence each on Monday morning in London.
Laura Ashley said its unscheduled update was in response to "press speculation regarding its financial position". The Times reported on Sunday that its Malaysian owners were trying to save the high street chain with an emergency cash injection.
https://www.thetimes.co.uk/article/malaysia-s-mui-group-owned-by-khoo-kay-peng-in-race-to-save-laura-ashley-svlc95d8k
The clothing and homewares retailer said on Monday that for the 26 weeks to the end of December, total group sales were GBP109.6 million, down 11% from GBP122.9 million for the same period a year prior. The decline was attributed to market headwinds and weaker consumer spending.
Laura Ashley said recent movement in store stock and customer deposit levels have resulted in a reduction to the amount it can withdraw from its bank facility with lender Wells Fargo. It confirmed that, as a result, it is in discussions with Wells Fargo and majority shareholder MUI Asia Ltd to figure out an arrangement that will allow the company to draw down additional amounts to meet its working capital needs in the short to medium term.
Looking ahead, Chair Andew Khoo said: "We acknowledge that recent trading conditions, in line with the overall UK retail market, have indeed been challenging. There is however, a robust plan in place to turn the business around and we are confident and optimistic that the recent appointment of Katharine Poulter as chief executive will enable the business to execute this broad based strategy".
By Ife Taiwo; [email protected]
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