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Laura Ashley confirms need for bigger loan as sales struggle

Majority shareholder MUI Asia is negotiating to expand an existing facility with the bank and will not provide a cash injection

Laura Ashley Holdings plc - Laura Ashley confirms discussions to expand facility with Wells Fargo

Laura Ashley Holdings plc (LON:ALY) crashed on Monday as it confirmed speculation that it needs to boost its loan facility to cope with tough trading.

The struggling homeware and clothing brand said its majority shareholder MUI Asia is talking with US bank Wells Fargo to expand the existing working capital arrangement.

“If the group remains unable to access the requisite level of funding, then the company will need to consider all appropriate options,” it said in a statement.

MUI, which holds 51% of the company including its owner Khoo Kay Peng’s stake, will not provide a further cash injection.

The retailer, famous for its floral prints, said sales for the first seven weeks of 2020 were flat and is planning a turnaround strategy.

For the 26 weeks to 31 December, total sales dropped 10.8% to £109.6mln, due to "weaker consumer spending".

Shares collapsed 49% to 1.65p on Monday at the opening bell.

--Adds shares--

Quick facts: Laura Ashley Holdings plc

Price: 0.305 GBX

LSE:ALY
Market: LSE
Market Cap: £2.22 m
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