Struggling fashion & homewares chain Laura Ashley is seeking to borrow additional funding to stay afloat in the midst of a dispute with its lender.
The firm’s Malaysian owner MUI Group is renegotiating its access to a £20 million (US$26 million) fund put up by Wells Fargo last October. As an asset-backed loan, the amount made available to the chain by the lender has dropped along with its stock value.
MUI has stated it needs the financing to “meet the group’s immediate funding requirements, and to draw down additional amounts to meet ongoing working capital needs”.
The firm has had a rough financial year, with figures showing a 10.8-per-cent drop in sales in the first half compared to last year’s results following a drop in consumer spending.
“We acknowledge that recent trading conditions, in line with the overall UK retail market, have indeed been challenging,” said MUI chairman Andrew Khoo. “There is however a robust plan in place to turn the business around … 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.”
The firm will consider “all appropriate options” should talks regarding the funding break down.