Laura Ashley share price collapses as coronavirus forces it into administration
The retailer has gone bust as a result of the Covid-19 outbreak having a significant impact on its performance, with the news sending its shares tumbling more than 60% on Tuesday.
Laura Ashley saw its shares fall more than 60% on Tuesday after it announced that it intends to appoint administrators due to the Covid-19 outbreak having and immediate and significant impact on its performance.
The retailer has struggled over the last few years to deal with a myriad of macroeconomic headwinds, with the company cutting costs and closing stores in a bid to offset a slump in sales.
Laura Ashley was trading at just 3p a share at the start of 2020, with the stock, which will see trading suspended, losing almost all its value on Tuesday after falling into administration.
Coronavirus seals Laura Ashley’s fate
The company has closely monitored the impact of the Covid-19 outbreak and after reviewing its immediate cashflow forecasts decided to appoint administrators.
For the seven weeks up to 13 March, trading at Laura Ashley improved by 24% year-on-year and the directors were encouraged by this strong performance, the company said in a statement.
‘However, the COVID-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation.’
British retailers buckle under the pressure
Laura Ashley is the latest in a growing list of UK retailers that have collapsed under the weight of a challenging retail environment for British businesses.
In August 2018, House of Fraser went bust, with Sports Direct CEO Mike Ashley swooping in to snap up the beleaguered department store.
Last year, saw the downfall of Debenhams, exemplifying the strain that high rents and consumers purchasing more items online is having on high street retailers.
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