Clothing and furnishing retailer Laura Ashley (ALY.L) said on Monday its main banking lender and majority shareholder were in talks regarding the company’s immediate funding needs, as it reported a drop in half-year revenue.
The fashion house, a favourite of Princess Diana in its 1980s heyday, is the latest victim of a troubled couple of years for British retailers, its sales hit by store closures, weakness in its home furnishings business and a worsening consumer mood.
The company said on Monday recent movements in its stock and customer deposit levels had led to a reduction in the amount it can draw down under the working capital facility with U.S. bank Wells Fargo & Co (WFC.N).
The lender provided an asset-based loan of 20 million pounds to Laura Ashley last year, using the company’s assets as collateral.
The bank and Laura Ashley’s majority shareholder MUI Asia Ltd are discussing arrangements that will let the retailer use funds from the facility for immediate requirements, and to draw down additional amounts to meet ongoing working capital needs in the short to medium term.