British home furnishing and fashion brand Laura Ashley faces an uncertain future in Australia after the women’s clothing and homewares retailer, famed for its pastels and prints, called in the administrators amid talk of store closures after some seasons of embattled trading.
The Australian arm of the British-based retailer entered voluntary administration on Thursday, however no details have been revealed about the extent of the company’s problems.
Ross Olde and John Park of FTI Consulting have been appointed as administrators of the company, which has operated in New Zealand and Australia under licence from its UK parent since 1971.
Each of the retailer’s 38 Australian stores will continue to operate while FTI assess its books and outlets.
“It is the administrators’ intention to continue to trade business as usual while an urgent assessment of the company’s financial position is conducted,” a statement from FTI said.
FTI added it would be necessary to assess the performance “trading of individual stores”, suggesting it might streamline the store network to survive.
Staff will continue to be paid.
The appointment of administrators does not apply to the NZ business or the British operation, so the company’s four stores in NZ are not affected.
The news comes just days after fellow retailer and electronics giant Dick Smith was placed in receivership.
Laura Ashley is discounting stock up to 70 per cent through its online store as did Dick Smith.
Laura Ashley’s UK-based parent, Laura Ashley Holdings, reported a flat first half pre-tax profit of A$17.39 million last September.
The UK company has about 300 franchised stores around the world.
Franchise and licensing revenue from those businesses fell by nearly a third in the first half.
At the time, the company blamed the slump on problems with its businesses in Japan and Russia but made no mention of its Australian arm.
However it did flag plans for expansion in Asia.
The sole director of Laura Ashley Australia, Daryl Chait, acquired the Laura Ashley Australia business in 2007. Despite rebuilding and expanding the business, it is believed that Laura Ashley’s product range stopped meeting customer requirement.
Chait was also the sole director of Parque, the owner of the FAT independent fashion chain, which was put into administration in February last year.
It has been alleged that the costs associated with FAT’s collapse have contributed to Laura Ashley Australia’s financial difficulties.
A creditors’ meeting has been scheduled before January 19.
