Laura Ashley battles for survival as losses soar to £4m
Fashion retailer Laura Ashley's losses ballooned in a tough year as the firm continues to stay afloat after securing a £20m loan.
The loss before tax hit £4m in 2019, up from £1.5m the year before. Sales were £109.6m, a fall of nearly 11%.
It comes as the retailer, with a store in Norwich, concession in Eaton's Waitrose and a store in Beccles, won a victory on Wednesday when it announced it would be allowed to use a loan for its daily operations.
"The group should be able to utilise requisite funds from its working capital facility with Wells Fargo to meet its immediate funding requirements," Laura Ashley said in a statement to the stock exchange.
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It comes two days after the business announced its main shareholder, MUI Asia, was in last-ditch talks with Wells Fargo over the retailer's future.
Laura Ashley revealed the talks after reports appeared in the press over the weekend, but on Monday it denied claims that MUI Asia would put money into the business to help it stay afloat.
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It had been unable to access some of the funds after restrictions on the £20m loan arrangement kicked in.
On Wednesday it again stressed that MUI was not coughing up any cash: "As previously announced, this is not a cash injection by MUI Asia Ltd into the group."
The business's shares clawed back some of the losses they had racked up earlier in the week, rising by 0.35p to 2p, a 21% increase.
However, it is still well below the company's closing price of 3.25p on Friday, before the talks were revealed.
It comes after a nightmare year for the struggling retailer.
In August the business announced it had swung to a £14m loss in the year to June 30, compared with a £100,000 profit the year before.
Months earlier Flacks Group, a private investor based in Manchester, dropped a potential £20 million bid for the company.