Coronavirus: Retail vulture funds eye remnants of Laura Ashley

Wednesday 25th March 2020 14:00 GMT

Sky News has learnt that Hilco and Retail Realisations were preparing to table offers for Laura Ashley's remaining estate of 77 stores ahead of a deadline set by administrators on Wednesday.

Gordon Brothers, another specialist in liquidating distressed retailers' stock, is also said to have been examining an offer for the business.

Laura Ashley plunged into administration earlier this week, blaming the COVID-19 pandemic for a collapse in sales.

The business had been struggling, however for some time, and had launched a frantic search for £25m of new funding prior to the outbreak of the virus.

Hilco, which owns Homebase and previously owned HMV, was in talks to inject that capital prior to Laura Ashley's collapse.

Retail Realisations has worked on the liquidation of retailers including Comet and Austin Reed.

A source close to the situation said that talks were ongoing with potential buyers.

PricewaterhouseCoopers, which was appointed to oversee the insolvency process, immediately closed 70 of Laura Ashley's 147 UK stores, triggering more than 700 redundancies.

A further 1,900 people work for the company, although the remaining shops have been shut following a government order to all 'non-essential' retailers.

"The strategy announced [on Monday[, 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," Rob Lewis, joint administrator, 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."

Laura Ashley, which was founded in 1953 by Laura and Bernard Ashley in their London flat, became popular because of its floral print designs.

Notable fans of its styles included the late Diana, Princess of Wales.

In February, it looked to have secured crucial support in the form of a £20m borrowing facility from Wells Fargo, the American Bank.

The company, which was valued at more than £200m when it floated during the 1980s, was valued by the stock market at just £10m prior to the suspension of its shares.

As well as its UK stores, it also has shops in Ireland and France, and franchise and licensee operations in 25 other countries.

The retail sector is facing extraordinary pressure from the pandemic, with most chains now temporarily closed.

Some relief has been granted to them in the form of emergency government aid schemes, although uncertainty over the length of the coronavirus disruption means that many retailers remain anxious about their long-term prospects.

A PwC spokesman declined to comment.

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