Fashion chain Laura Ashley has filed for administration, putting up to 2,700 jobs at risk, after rescue talks were halted by the coronavirus outbreak.
The troubled retailer had been in talks with stakeholders over refinancing, but it said its “revised cash flow forecasts and increased uncertainty” mean it will not be able to secure these funds in sufficient time.
Largest shareholder Mui Asia said it was unable to support the retailer with “financial support in the required timeframe”.
Laura Ashley said it hired advisers from PwC to oversee the administration on Tuesday.
The retailer operates 150 stores in the UK and employs around 2,700 staff.
Earlier this week, it was reported that it was in discussions about the £15 million loan with private equity fund Hilco Capital to finance its immediate working capital requirements.
Laura Ashley said it had seen an upturn in sales in recent weeks, with trading up 24% year on year for the seven weeks to March 13.
However, it said the Covid-19 virus outbreak has “had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation”.
The announcement comes after a challenging period for the clothing and furnishings brand, which saw pre-tax losses balloon to £4 million in 2019.
Sales for the year also plunged by 11% to £109.6 million for the year.
Shares in the company plummeted 68.9% to 0.3p in early trading on Tuesday. It has also asked for its shares to be suspended from trading on the London Stock Exchange.
Julie Palmer, partner at Begbies Traynor, said: “Laura Ashley is the first high-profile business casualty to fall victim to coronavirus and unlikely to be the last as we start to see the impact of this pandemic on the UK economy.
“As the UK closes its doors, footfall will plummet ever further, emptying stores and causing increasing financial distress.”