PETALING JAYA: Malaysian-owned fashion and furniture retailer Laura Ashley has confirmed that it is in make-or-break talks with its bank over access to emergency funding after disclosing a slump in sales amid “challenging” times.
Britain’s The Guardian reported that the UK-listed company said it would have to “consider all appropriate options” if it cannot secure emergency funding.
Laura Ashley employs more than 2,700 workers in 155 stores across the country, and there are plans to close more outlets, the report said.
It said MUI Asia, controlled by multimillionaire Khoo Kay Peng, and Wells Fargo are attempting to reach an agreement over the company’s funding requirements in the short to medium term.
Laura Ashley reported a 10.8% decline in sales year-on-year in the second half of 2019, blaming “market headwinds and weaker consumer spending”, which it said had dampened demand for larger, more expensive items.
Sales were flat for the first seven weeks of trading this year, the report said.
It said the pressures on the retailer have been exacerbated by a fall in stock levels after Christmas, which has reduced its ability to offer assets in exchange for secured loans.
In 1998, MUI became a shareholder of Laura Ashley, started in 1953 by Laura Ashley and her husband Bernard, adding it to other properties including hotels, food and financial services. Khoo was succeeded by his son Andrew as Laura Ashley’s chairman in 2018.
The report quoted Andrew as saying: “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 the board of directors is confident and optimistic that the recent appointment of Katharine Poulter (the incoming chief executive) will enable the business to execute this broad-based strategy.
“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.”