Hope for Laura Ashley following funding fears

Laura Ashley, the fashion and home retailer which has a dozen stores across Yorkshire, says it should be able to meet “immediate funding requirements” following discussions with its bank.

Earlier this week the company reported it was in talks with its lender about accessing enough money to continue trading.

The listed business warned that if it could not get the necessary amount of funding, it would need to consider its options.

Laura Ashley’s biggest shareholder is Malayan United Industries (MUI).

In a statement released today, the retailer said: “In response to press speculation, the Board of Laura Ashley Holdings PLC is pleased to announce that discussions between Wells Fargo and MUI Asia Limited relating to the Group’s immediate funding requirements have concluded.

“The Group should be able to utilise requisite funds from its working capital facility with Wells Fargo to meet its immediate funding requirements.

“As previously announced, this is not a cash injection by MUI Asia Limited into the Group.

“The company welcomes the support from MUI and continues to review its working capital needs on an ongoing basis.  

“The company will update shareholders in due course in relation to the review of its working capital needs.”

Reacting to the news, Nick Burchett, fund manager at Cavendish Asset Management, who is a shareholder in Laura Ashley through the TM Cavendish Opportunities fund, said: “It’s good news for the company in the short term but it might not hold up for long.

“There are balance sheet constraints and the inescapable problem on the high street of high business rates which mean the company may end up looking to secure more short-term funding in the near future.

“While it hasn’t moved with the times, the company now needs to double down on the vintage styles and luxury brand image it has, with the breathing room it’s been given by this funding arrangement.

“Otherwise it could be curtains for another well-known high street name.”