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Vulture funds pick over Laura Ashley remains

by ace
Vulture funds pick over Laura Ashley remains

A packet of retail vulture funds is vying for the remains of the fashion and furniture chain Laura Ashley, which collapsed into insolvency earlier this week.

Sky News learned that Hilco and Retail Realizations were preparing to present offers for the remaining 77-storey Laura Ashley property ahead of the deadline set by administrators on Wednesday.

Gordon Brothers, another specialist in liquidating shares in distressed retailers, is said to be examining an offer for the business.

Laura Ashley joined the administration earlier this week, blaming the COVID-19 pandemic for the collapse in sales.

However, the company had been struggling for some time and launched a frantic search for £ 25 million in new funds before the virus broke out.

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Hilco, owner of Homebase and previously owned by HMV, was in talks to inject that capital before Laura Ashley's collapse.

Retail achievements worked on liquidating retailers, including Comet and Austin Reed.

A source close to the situation said negotiations were underway with potential buyers.

PricewaterhouseCoopers, which was appointed to oversee the insolvency proceedings, immediately closed 70 of Laura Ashley's 147 stores in the United Kingdom, causing more than 700 redundancies.

Another 1,900 people work for the company, although the remaining stores were closed after a government order from all "non-essential" retailers.

"The announced strategy (on Monday (which includes the permanent closure of 70 stores) provides a viable solution to help restructure business, although there are some stores that have not been closed, where we will enter into discussions with the owners to seek to agree to change the terms of the contract to improve viability, "said Rob Lewis, joint administrator.

"Like many other retailers, Laura Ashley has been hit hard by market headwinds and weaker consumer spending. For a retail sector that is already under severe pressure, the current environment driven by COVID-19 is unprecedented."

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Laura Ashley, founded in 1953 by Laura and Bernard Ashley in their London apartment, became popular because of their floral print designs.

Notable fans of her styles included the late Diana, Princess of Wales.

In February, it appeared to have secured crucial support in the form of a £ 20 million line of loans from Wells Fargo, the Bank of America.

The company, valued at over 200 million pounds when it floated in the 1980s, was valued by the stock market at just 10 million pounds before its shares were suspended.

In addition to its stores in the United Kingdom, it also has stores in Ireland and France and franchise and license operations in 25 other countries.

The retail sector is facing extraordinary pandemic pressure, with most chains now temporarily closed.

They were given some relief in the form of emergency government aid schemes, although uncertainty about the duration of the coronavirus outage means that many retailers remain anxious about their long-term prospects.

A PwC spokesman declined to comment.

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