Laura Ashley shares crash as troubled retailer reveals it is seeking a funding lifeline from US bank Wells Fargo
- Laura Ashley needs more money to meet 'immediate funding requirements'
- Its Malaysian owner, MUI Asia Limited, is in talks with US lender Wells Fargo
- Laura Ashley said sales fell 11 per cent in the last half of 2019
Laura Ashley shares have fallen more than 40 per cent after the troubled high street retailer confirmed it needs a loan to cope with 'challenging' trading conditions.
The homeware and fashion chain said that its Malaysian owner, MUI Asia Limited, is in talks with US lender Wells Fargo to unlock more money to meet 'immediate funding requirements'.
If it does not manage to access the required amount of money, it 'will need to consider all appropriate options'.
Laura Ashley's Malaysian owner is in talks with lenders to unlock more money to meet 'immediate funding requirements'
It comes as Laura Ashley said sales fell 11 per cent in the last half of 2019 due to 'market headwinds' and weaker consumer spending.
The chain, which was founded in 1953 and was a favourite of Princess Diana in its 1980s heyday, has struggled to stay relevant in recent years as its floral, frilled and ruffles-heavy outfits fell out of fashion.
'We acknowledge that recent trading conditions, in line with the overall UK retail market, have indeed been challenging,' chairman Andrew Khoo said.
'There is however a robust plan in place to turn the business around and the Board of Directors is confident and optimistic that the recent appointment of Katharine Poulter will enable the business to execute this broad based strategy.'
Laura Ashley shares were down 41 per cent at 1.90p towards the close on Monday.
Laura Ashley agreed a £20million loan arrangement with Wells Fargo in October last year.
However, restrictions in the loan meant that the chain would be prevented from drawing it all unless it could meet some criteria.
'Recent movements in the group's stock and customer deposit levels have led to a reduction in the amount that the group can draw down under its working capital facility with Wells Fargo,' the company said.
The company said MUI Asia and Wells Fargo are 'discussing arrangements' that would allow Laura Ashley to draw on more of the loan. However 'these arrangements do not involve a cash injection by MUI Asia'.
The chain was founded in 1953 and was a favourite of Princess Diana in its 1980s heyday
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