Laura Ashley has announced the permanent closure of 70 stores, with 721 employees set to lose their jobs.
It comes after the fashion and furnishings retailer announced its intention to hire administrators last week, blaming the impact of coronavirus for tipping it over the edge.
A host of retailers, including John Lewis and Ikea, have announced temporary store closures in the face of the pandemic over the weekend.
However, Laura Ashley is one of the first to announce permanent closures after the virus exacerbated a recent downturn in profitability.
A woman wearing a face mask walking past a Laura Ashley store in South Woodford, London
It said it will continue to trade from its remaining 77 UK stores, which will remain open while online operations also continue to trade.
Laura Ashley added that it expects to enter administration later on Monday after appointing advisers from PwC to oversee the process.
Last week, the company said it would enter insolvency after rescue talks were thwarted by the coronavirus outbreak, which has heavily impacted high street firms.
It said its administrators will now be working to support employees who are set to be impacted by the raft of closures.
The administrators will also initially focus on talking with interested parties in a bid to secure a buyer for the historic firm.
Laura Ashley has announced the permanent closure of 70 stores, with 721 employees set to lose their job
Katherine Poulter, chief executive officer of the business, said she is ‘hopeful’ that it will find a buyer for the brand.
She added: ‘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.
‘The vision also included reconnecting with our traditional values and our strong British heritage and focusing on developing Laura Ashley as a lifestyle brand.
‘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.’
The chain’s troubles echo a wider malaise on the high street, which is struggling against online rivals, rising rents and business rates (file photo)
The retailer operates 150 stores in the UK and employs around 2,700 staff – now to be significantly reduced.
Last week, it was reported that it was in discussions about the £15 million loan with private equity fund Hilco Capital to finance its immediate working capital requirements.
Laura Ashley said it had seen an upturn in sales in recent weeks, with trading up 24% year on year for the seven weeks to March 13.
However, it said the Covid-19 virus outbreak has ‘had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation’.
Laura Ashley with her Husband Bernard in Sloane Square, November 1981. The pair opened their first shop in the 1960s in Wales
The announcement comes after a challenging period for the clothing and furnishings brand, which saw pre-tax losses balloon to £4 million in 2019.
Sales for the year also plunged by 11% to £109.6 million for the year. Shares in the company plummeted 68.9% to 0.3p in early trading today.
It has also asked for its shares to be suspended from trading on the London Stock Exchange.
Laura and Bernard Ashley first opened a shop in 1960, in Machynlleth, Wales, which they lived above, there they sold locally produced honey, walking sticks as well as their own products before moving into fashion.
Chancellor Rishi Sunak said 80 per cent of workers’ salaries – up to a maximum of £2,500 a month each – would be covered by a government grant if firms kept them on
On Friday chancellor Rishi Sunak made an unprecedented bailout promise to underwrite employees’ wages, a moved hailed for saving aproximately 800,000 jobs during the coronavirus epidemic.
The Chancellor told the Downing Street press briefing that the new grant would cover 80 per cent of workers’ salaries – up to a maximum of £2,500 a month each – if firms kept them on.
Analysts who were forecasting 1.5million increase job losses because of the health crisis cut their prediction to 700,000 unemployed just minutes after the announcement.