Laura Ashley’s Malaysian owner MUI Asia has confirmed it is in talks with its bank Wells Fargo over access to emergency funding.

The fashion and furniture retailer revealed that sales fell 10.8 per cent year-on-year in the second half of last year, which it blamed on “market headwinds and weaker consumer spending”. Sales were flat for the first seven weeks of trading this year.

The company said it would have to “consider all appropriate options” if more investment could not be secured, putting more than 2,700 jobs potentially at risk.

It already plans to close 155 UK stores, following continued profit warnings during 2019. Recently, pressure has mounted due to a fall in stock levels after Christmas, which reduced the ability to offer assets in exchange for secured loans.

MUI became a shareholder in 1998, with Andrew Khoo, the son of group boss Khoo Kay Peng, succeeding his father as Laura Ashley’s chairman in 2018.

MUI executive chairman Andrew Khoo said: “There is a robust plan in place to turn the business around and the board of directors is confident and optimistic that the recent appointment of [incoming chief executive] Katharine Poulter 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.”

The statement noted that the latest talks did not include a cash injection into the group, contrary to some reports.

Share Story: