Laura Ashley share price collapses as coronavirus forces it into administration
The retailer has gone bust as a result of the Covid-19 outbreak having a significant impact on its performance, with the news sending its shares tumbling more than 60% on Tuesday.
Laura Ashley saw its shares fall more than 60% on Tuesday after it announced that it intends to appoint administrators due to the Covid-19 outbreak having and immediate and significant impact on its performance.
The retailer has struggled over the last few years to deal with a myriad of macroeconomic headwinds, with the company cutting costs and closing stores in a bid to offset a slump in sales.
Laura Ashley was trading at just 3p a share at the start of 2020, with the stock, which will see trading suspended, losing almost all its value on Tuesday after falling into administration.
Looking to trade market volatility driven by Covid-19? Open a live or demo account with IG today.
Coronavirus seals Laura Ashley’s fate
The company has closely monitored the impact of the Covid-19 outbreak and after reviewing its immediate cashflow forecasts decided to appoint administrators.
For the seven weeks up to 13 March, trading at Laura Ashley improved by 24% year-on-year and the directors were encouraged by this strong performance, the company said in a statement.
‘However, the COVID-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation.’
British retailers buckle under the pressure
Laura Ashley is the latest in a growing list of UK retailers that have collapsed under the weight of a challenging retail environment for British businesses.
In August 2018, House of Fraser went bust, with Sports Direct CEO Mike Ashley swooping in to snap up the beleaguered department store.
Last year, saw the downfall of Debenhams, exemplifying the strain that high rents and consumers purchasing more items online is having on high street retailers.
You can go long or short various asset classes with IG using derivatives like CFDs.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets
- Forex
- Shares
- Indices
