PwC called in to Laura Ashley administration
24 Mar 2020
PwC is handling the administration of lifestyle brand Laura Ashley, which has collapsed putting hundreds of jobs at risk, after the outbreak of coronavirus further weakened its financial position
24 Mar 2020
Rob Lewis and Zelf Hussain, partners at PwC, have been appointed as joint administrators of Laura Ashley Holdings, its key trading subsidiary Laura Ashley Ltd, Premier Home Logistics Ltd, Laura Ashley Investments Ltd, and Texplan Manufacturing Ltd.
Founded by a husband and wife team in the 1950s, Laura Ashley has grown to become an international lifestyle brand which specialises in furniture retailing, home accessories, decorating and fashion products.
The group has retail stores based in the UK, Republic of Ireland and France and franchise and licensee operations located across the world in 25 territories.
The UK property portfolio comprises 147 stores, and the group also has significant operations in Newtown in Powys, Coalville in Leicestershire and Chelsea. The entities in administration employ 1,624 retail staff and 1,034 head office, distribution and logistics, call centre and manufacturing staff.
As previously stated by the group, the covid-19 outbreak had an immediate and significant impact on trading.
Based on its cashflow forecasts and the increased uncertainty facing it, the group expected that it would not be in a position to draw down additional funding in a timely manner sufficient to support its working capital requirements, and as a result, each of the companies have now entered administration.
The administrators have announced that 70 UK stores have been closed permanently with immediate effect and, potentially, 721 employees will be affected.
The joint administrators said Laura Ashley will continue to trade the remaining business while discussions take place with interested parties with the aim of securing a buyer.
At the time the administration was announced, prior to Prime Minister Boris Johnson’s declaration of more stringent regulations to contain the pandemic, the administrators expected the remaining 77 UK stores to stay open as normal subject to government guidance. Purchases will continue to be accessible online.
Rob Lewis, joint administrator and PwC partner, said: ‘The strategy announced today, which includes the permanent closure of 70 stores, provides a viable solution to help restructure the business, albeit there are some stores that have not been closed where we will be entering into discussions with landlords to seek to agree changes to lease terms to improve viability.
‘In the current environment, we understand that the staff at the closed stores will have significant concerns, and so we will be working closely with them, given it is very likely that redundancies will have to be made.
‘We have secured funds to ensure all staff will be paid their March wages as normal.
‘Alongside supporting staff, our key objective as administrators is to engage with parties who are interested in acquiring the business. There have already been solid expressions of interest from potential bidders.
‘We are hopeful the right buyer will be secured to provide a future for Laura Ashley, an iconic UK brand that is known around the world.’
Zelf Hussain, joint administrator and PwC partner, said: ‘Like many other retailers Laura Ashley has been hit hard by market headwinds and weaker consumer spending. For a retail sector already under severe pressure, the current environment driven by covid-19 is unprecedented.
‘We will continue to closely monitor the government advice in relation to covid-19 and factor that into our strategy as the situation develops.’