High street retailer Laura Ashley collapsed into administration, announcing the coronavirus outbreak has had “an immediate and significant impact on trading”, says Jessica Clark in City AM. It is the first retail casualty of the coronavirus crisis, and has has placed 2,700 jobs at risk.
The retailer said it was unable to secure third party backing or additional financial support from main shareholder Mui Asia, and has filed notices of its intention to appoint PwC advisers Robert Lewis and Zelf Hussain as administrators.
Trading had actually improved by 24% in the seven weeks to 13 March 13, the company said. But the rapid spread of Covid-19 across Europe soon reversed its fortunes.
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The news comes after the “struggling” retailer announced it had secured access to a £20m lifeline in emergency talks between Malaysian owner Mui Asia and Wells Fargo. Laura Ashley shares were down by 96% before trading was suspended at the company's request, says James Sillars in Sky News.
Covid-19 is a serious blow to an already sick high street
The coronavirus crisis adds on to the struggle the high street has faced in the last few years, following a slump in consumer confidence coupled with a surge in costs, with business rates, rents and minimum wage demands all rising.
Retail is among UK sectors pleading for financial help as the economy grinds to a halt during the unprecedented public health emergency, Sillars says.
Chancellor Rishi Sunak is expected to unveil a “significant” rescue package for businesses hit by Covid-19, says Alan McGuinness in Sky News. The economic rescue package comes less than a week after he unveiled a £12bn package to support the economy amid the coronavirus pandemic. The package will include assistance for pubs, clubs and theatres. Prime Minister Boris Johnson said the public should avoid these places in order to minimise risk of spreading the infection – though he fell short of issuing an outright ban.
Industry figures have warned that many businesses could be forced to close if the government fails to offer financial help. Worries about cash flow have also been expressed by the self-employed, low-paid workers, and those on zero-hour contracts.
Shadow chancellor John McDonnell called on Sunak to “get this right”. He added: ”We need an unequivocal statement from the chancellor today that people's incomes will be protected and that businesses will be fully supported to prevent any going out of business as a result of the virus, and it has to be on a scale sufficient to meet this crisis.”
Lib Dem acting leader Sir Ed Davey echoed McDonnell’s call for support, saying: "The government bailed out the banks and the financial sector with hundreds of billions back in 2008. The government must now be there for millions of businesses, employees and the self-employed – Britain's real economy.”
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