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Following this morning’s news that Laura Ashley has filed for administration amid the coronavirus (Covid-19) outbreak, experts are warning this could be a sign of things to come – with more big high-street stores set to face the same fate.
The high-street retailer may well become the first casualty of the current crisis, here’s what we know…
Laura Ashley closing down
The high-street homeware store was rumoured to already be in talks with stakeholders over refinancing. According to the Evening Standard, it has since said ‘revised cash flow forecasts and increased uncertainty” mean it will not be able to secure these funds in sufficient time.’
‘Laura Ashley blames recent poor trading (at least in part) to the Covid-19 outbreak,’ says Amy Higginbotham, Retail Analyst at GlobalData, a leading data and analytics company.
‘Though this has no doubt had a significant impact on its performance over the past week or so, the retailer has been struggling for a while. The brand has long been tired and has struggled to regain relevance in both its fashion and home divisions.’
Which store closures are next?
In these unsettling times Amy goes on to warn, ‘Financially weak retailers, of which there are many, are likely to follow Laura Ashley into administration given the current crisis. Those retailing non-essential purchases that can easily be deferred will be particularly badly hit.’
Reports from the Financial Times have already indicated Debenhams has asked landlords for a five-month rent freeze – as it’s set to struggle with the current crisis.
Dixons Retail recently announced that it is closing all 531 standalone Carphone Warehouse stores on the high street. Is has not stated this is because of the virus, but the timing couldn’t be worse.
What other high street favourites will follow these store closures?