British fashion and home furnishing company Laura Ashley announced the permanent closure of 70 stores on Monday, putting 721 jobs at risk as the struggling retailer brought in administrators to help repay its debts.
The heritage brand – which has sites across the UK – said it will continue trading from its remaining 77 outlets and that online shopping would not be affected by the closures.
A spokesperson for Laura Ashley could not confirm with The Independent that the move was directly linked to the coronavirus outbreak. However, the company blamed the impact of the pandemic for tipping it over the edge when filing for administration earlier this month.
In a statement announcing the closures, chief executive officer Katharine Poulter appeared to confirm that jobs would be lost. Ms Poulter added she remains hopeful of finding a buyer to take the company forward.
“Since my appointment just last month, I have shared my vision for the future of this brand, accompanied with a robust turnaround plan to set the future direction of the company and return Laura Ashley to the great British brand that is known and cherished around the world,” Ms Poulter said.
“I remain unwavering in my belief that Laura Ashley can and should retain the place it deserves in the international retail landscape. Unfortunately, we will lose some brilliant people through no fault of their own."
She added: "However, I remain hopeful there is a buyer out there who shares my vision and can see the enormous potential of this iconic British brand that is known and loved around the world.”
Laura Ashley – which has 2,700 employees – filed for administration on 17 March after failing to secure £15 million of emergency cash to stay afloat. It is working with advisers at consultancy firm PwC to find a buyer after the companies owners, MUI Asia, said it would not be providing financial support.
The company is among a number of British retailers struggling during the Covid-19 outbreak as shoppers are urged to remain at home to help stop the spread of the virus.
Last week, Burberry estimated that it was set to see a 30 per cent drop in sales as it announced the closure of more than half its outlets across Europe, the Middle East, India and Africa as government across the world enforced social distancing measures.
Browns and MATCHESFASHION also shut stores across the UK for the foreseeable future, with both companies declaring that the safety of staff and customers was paramount during these “unprecedented times”.
Accountancy giant KPMG on Monday said that the pandemic has brought the UK economy to a temporary standstill, forecasting 2.6 per cent decline in growth for 2020 in its quarterly report.
Flat growth is expected in the second half of the year, the firm said, adding that a protracted outbreak of Covid-19 could also result in a more severe impact than the 2008-09 downturn.
Releasing the report, Yael Selfin, KPMG UK’s chief economist, said: “The Covid-19 pandemic is first and foremost a human crisis.
“But there will also be a very substantial negative impact on the global economy and the UK’s economic performance this year and potentially next, but the economy is expected to recover by the second half of 2021.
“Until we know how and when the Covid-19 outbreak will end, the scale of the negative economic impact will be difficult to quantify.
“However, it is now almost certain that the UK is slipping into its first significant downturn in over a decade.”