* Laura Ashley to appoint administrators
* Says is in advanced talks for third-party debt funding
* Shares will be suspended from trading
(Adds shareholder comment, updates share move)
By Tanishaa Nadkar
March 17 (Reuters) - Laura Ashley said on Tuesday it
intends to appoint administrators as the coronavirus pandemic
has had an immediate and significant impact on the British
retailer's performance.
Shares in the retailer closed 64.3% lower at 0.305 pence.
British retailers have faced challenges in the past few
years and Laura Ashley, a favourite of late Princess Diana in
its 1980s heyday, has seen sales fall, store closures, weakness
at its home furnishings business and a worsening consumer mood.
The company said it was in advanced talks for third-party
debt funding but it would not be able to draw down additional
funds from lenders in time.
Its largest shareholder, MUI Asia, will not be able to
provide financial support either, Laura Ashley said.
"Coronavirus may have hastened the demise but the weak
online offering and a tendency to discount what is advertised as
high quality merchandise would leave any retail business on a
weak footing", Nick Burchett, fund manager at Cavendish Asset
Management, said.
Cavendish Asset Management is Laura Ashley's third biggest
shareholder with a stake of 1.73%, according to Refinitiv Eikon
data.
The clothing and furnishing retailer is the latest in a list
of brands once considered the mainstay of British shopping scene
to go under. House of Fraser and the department store chain
Debenhams have also been placed in administration.
Trading in the business for the seven weeks to March 13
improved by 24% compared to last year but the pandemic has kept
many shoppers away.
Laura Ashley intends to appoint Robert Lewis and Zelf
Hussain as administrators and said it was not certain whether
there would be any surplus assets available for shareholders of
the company.
The company said that its shares will be suspended from
trading on the London Stock Exchange from Tuesday.
Last month, Laura Ashley said its pretax losses more than
doubled in the first half of the year because of weak demand for
home furnishing products.
(Reporting by Tanishaa Nadkar and Samantha Machado in
Bengaluru;
Editing by Vinay Dwivedi and Barbara Lewis)
