PETALING JAYA: As the Covid-19 pandemic continues to wreak havoc on businesses across the globe, retailer Laura Ashley, which is controlled by Malayan United Industries Bhd (MUI), has filed for administration in the UK.
The retailer, which has been under pressure owing to declining sales, said its business has taken another hit due to the pandemic.
Noting that the situation was “still very fluid”, MUI group’s executive chairman and CEO Andrew Khoo told StarBiz that the company was working towards managing the effects of the pandemic in a responsible manner.
“Currently, our best efforts are placed in strategising viable and sustainable action plans towards mitigating the effects of Covid-19. Our first priority is to ensure the safety and well-being of our staff members, ” he said.
Khoo said the pandemic had impacted sales in the past weeks and as a result, the business was adversely affected.
On Laura Ashley’s intention to appoint an administrator, he said this was a well-established procedure in the UK that would enable the business to go through a structured process for the benefit of creditors, and “also hopefully for the long-term viability of the business”.
“MUI Bhd is closely monitoring the situation and has taken steps to prepare for any potential outcome arising from this. We will issue the relevant statement as soon as we have more detailed information in place on Laura Ashley and our other businesses, ” he added.
Following the developments at Laura Ashey, MUI saw its share price dive, falling 33.3% or 3.5 sen to close at 7 sen yesterday.
In its filing with the London stock exchange, the retailer said the pandemic has had “an immediate and significant impact on trading”.
Prior to this, the troubled clothing and household goods retailer said trading for the Laura Ashley business had improved by 24% year-on-year for the seven weeks up to March 13. However, the pandemic quickly took a toll on the business.
Laura Ashley said the company continued to closely monitor the impact of the Covid-19 outbreak and has reviewed its immediate cashflow forecasts.
“Discussions with stakeholders have been ongoing and the directors are in advanced discussions for the provision of third-party debt funding.
“However, based on the company’s revised cashflow forecasts and the increased uncertainty facing the group, the company expects that it will not be in a position to draw down additional funds from third-party lenders in a timely manner sufficient to support working capital requirements, ” it said.
It added that MUI Asia Ltd had confirmed that it is unable to provide financial support in the required timeframe.
The company said it had been concluded that all available alternative options had been explored and therefore, in order to protect the creditors, it was necessary to file a notice of intention to appoint administrators.