Covid-19 Halts Retailer’s Positive Trading Momentum
- Laura Ashley enters administration due to coronavirus impact
- Trading improved by 24% year-on-year before Covid-19 outbreak
- No timely funds available from third party lenders
- Administrators appointed to protect creditors
Embattled home and fashion retailer Laura Ashley has fallen into administration due to the immediate and significant impact of the coronavirus outbreak on its trading. The company had seen a 24% year-on-year improvement in trading for the seven weeks up to 13 March, but the Covid-19 outbreak halted this positive performance. Laura Ashley revealed that based on revised cashflow forecasts and increased uncertainty facing the group, it would not be able to draw down additional funds from third party lenders in a timely manner sufficient to support working capital requirements. The company has explored all available alternative options but, in order to protect creditors, decided to file a notice of intention to appoint administrators Robert Lewis and Zelf Hussain. A statement said: ‘If administrators are appointed in respect of the company, given the group’s creditor position, it is not certain whether there would be any surplus assets available to shareholders.’
Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about Laura Ashley’s financial situation and the impact of COVID-19 on its trading performance, without including irrelevant or sensational details, repetitive information, or personal opinions. It also presents facts without any bias.
Noise Level: 3
Noise Justification: The article provides relevant information about Laura Ashley’s financial situation and the impact of COVID-19 on its trading performance, but it lacks in-depth analysis or exploration of long-term trends or possibilities. It does not hold powerful people accountable nor explore consequences on those bearing risks. The language used is straightforward and stays on topic without diving into unrelated territories. While it doesn’t provide actionable insights, it does support its claims with evidence (trading data). Overall, the article is informative but could benefit from more context or analysis.
Financial Relevance: Yes
Financial Markets Impacted: Laura Ashley and related companies
Financial Rating Justification: The article discusses Laura Ashley’s financial situation, its trading performance, and its inability to draw down additional funds from third party lenders due to the COVID-19 outbreak, which has impacted its financial position. This directly relates to financial topics and affects the company itself and potentially related companies.
Presence Of Extreme Event: Yes
Nature Of Extreme Event: Financial Crisis
Impact Rating Of The Extreme Event: Severe
Extreme Rating Justification: The extreme event is a financial crisis due to the Covid-19 outbreak impacting the company’s trading and cashflow, leading to administration.
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