The fashion to homewares shop Laura Ashley is set to become the first retail casualty of the coronavirus crisis, placing 2,700 jobs at risk.

Sky News reported at the weekend how the firm was scrambling for a funding lifeline to avert collapse but the company all but admitted defeat on Tuesday, saying it had filed intentions to appoint administrators.

It said it hired advisers from PwC to oversee the administration process hours after Dixons Carphone announced it was to close all its Carphone Warehouse stores in the UK, with the loss of 2,900 workers.

Image: The closure of Carphone Warehouse stores was not blamed on COVID-19 disruption

Dixons Carphone said its decision was not related to the COVID-19 outbreak.

Laura Ashley, however, blamed its troubles on a "significant" drop-off in trade with no end to the coronavirus crisis in sight.


The company confirmed its majority shareholder and third-party lenders had been unable to provide additional support.

It had been seeking a £15m loan.

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Its statement said: "Based on the company's revised cashflow forecasts and the increased uncertainty facing the group, the company expects that it will not be in a position to draw down additional funds from third party lenders in a timely manner sufficient to support working capital requirements."

It added: "The directors of the company, its key trading subsidiary (Laura Ashley Limited), Premier Home Logistics Limited, Laura Ashley Investments Limited, and Texplan Manufacturing Limited, have concluded that all available alternative options have been explored and therefore, in order to protect creditors, it is necessary to file a notice of intention to appoint administrators in respect of the company and each of the named subsidiaries."

Government ramps up its coronavirus measures

Laura Ashley shares were trading 96% down before trading was suspended at the company's request.

The coronavirus crisis builds on a tough few years for the high street following a slump in consumer confidence coupled with a surge in costs from things such as business rates, rents and rising minimum wage demands.

It has forced a string of chains to collapse while others, including Sir Philip Green's Topshop empire, have secured rescue deals from creditors including landlords to cut their bills and allow unprofitable stores to close.

Retail is among UK sectors pleading for financial help as the economy grinds to a halt during the unprecedented public health emergency.

Chancellor Rishi Sunak is expected to build on measures in the budget, in conjunction with Bank of England action, in support of businesses later on Tuesday by extending help to ease the burden.

Amy Higginbotham, retail analyst at analytic specialist GlobalData, said of Laura Ashley's statement: "Laura Ashley blames recent poor trading (at least in part) to the COVID-19 outbreak, and though this has no doubt had a significant impact on its performance over the past week or so, the retailer has been struggling for a while.

"The brand has long been tired and has struggled to regain relevance in both its fashion and home divisions.

"Financially weak retailers, of which there are many, are likely to follow Laura Ashley into administration given the current crisis.

"Those retailing non-essential purchases that can easily be deferred will be particularly badly hit."