Laura Ashley collapse to be scrutinised by second administrator
A second administrator has been appointed to scrutinise the finances of struggling high street retailer Laura Ashley prior to its collapse into administration in March.
The new administrator, FRP Advisory, is also likely to investigate the role of the fashion chain’s former directors, including the chairman and chief executive Ng Kwan Cheong, who stepped down in January.
The Mid Wales-founded company has a large store in Vastre Enterprise Park in Newtown as well as stores in Shrewsbury, Telford, Birmingham, Sutton Coldfield and Wolverhampton.
At the time of its collapse, Laura Ashley, which operates more than 150 British shops, had a pension fund deficit valued at £50 million on the basis of a buyout by an insurance firm.
Administrators at PwC, who were appointed in March, reckon that they can raise only £27 million from selling off the company’s assets, according to their latest report filed at Companies House, while total debts stand at more than £162 million.
The company’s stores are still in the hands of administrators and expected to close permanently with the loss of more than 1,600 jobs once stock is cleared. Its manufacturing business is also on the market.
The Pension Protection Fund (PPF), an industry-backed body which acts as a safety net for the defined benefit pensions of insolvent companies, said it had requested the appointment of an additional administrator, FRP Advisory, last week to “investigate the activities of Laura Ashley Limited prior to the company’s insolvency”. It added: “Members of the Laura Ashley retirement benefits scheme, which remains in PPF assessment, can be assured of our ongoing protection.”
A spokesperson for the Pensions Regulator, which protects workplace pensions and has the power to recover late or missing payments from a business owner on behalf of a scheme, said: “We are monitoring the situation at this challenging time and working closely with the company, its advisers, the PPF and trustees of the Laura Ashley retirement benefits scheme as they work to secure the best possible outcome for members.”
Born in Merthyr Tydfil, Laura Ashley began making Victorian style head scarves in 1953 founding a company with her husband Bernard.
In 1960, they moved from Kent to Mid-Wales and they opened their first shop in 1961 at Machynlleth.
Later that year they moved to Carno where they set up their first factory.
They expanded to have factories in Newtown and open up shops across the world.
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