THE HIGH COURT has appointed joint provisional liquidators to the Irish arm of the fashion retailer Laura Ashley, which operates five stores in Ireland.
Laura Ashley Ireland Ltd, which is part of the Laura Ashley group and employs 76 people in Ireland, sought the winding up order arising out of its UK parent’s decision to enter administration in that jurisdiction.
The group, which sustained loses in recent years, entered administration after the outbreak of Covid-19 ended its attempts to raise third-party investment that it said it required in order to continue to trade.
At the High Court this afternoon, Mr Justice Michael Quinn said he was satisfied to appoint experienced insolvency practioners Ken Tyrell and Declan McDonald of PWC as the company’s joint provisional liquidators.
The evidence before the court was that the company was insolvent.
Seeking their appointment Rossa Fanning SC for the Irish firm told the court that the UK parent had informed his client that because of the administration it would no longer be able to provide the Irish company with any further financial support.
Without that support the Irish company, which had seen a decline in revenue in recent years, could not survive as it has a balance sheet deficit of over €563,000.
Counsel said that in addition to the parent group’s situation, the Irish firm had also been experiencing financial difficulties in recent years.
However the Covid-19 outbreak has had on catastrophic impact on its financial position.
In line with all other retailers the five Irish stores closed some weeks ago.
Prior to closing their doors that there had been a dramatic reduction in customer volumes and sales when people stopped going to shops, he added.
Counsel said the Irish company has liabilities of €3.3m, 80% of which was owed to other companies within the group. Other creditors include Revenue, trade creditors and landlords.
The appointment of provisional liquidators would help ensure an orderly winding up, and was in the best interests of the all the parties concerned.
Counsel also said that the parent firm’s administrators had been in talks with a party interested in acquiring some of the group’s Irish and UK assets.
A successful sale, counsel added, could potentially result in some or all of the Irish jobs and the business being saved.
It was also envisaged that the provisional liquidators will work with the administrators of the UK parent as part of the asset sale process, counsel said.
The parent company, which had made loses in recent years, went into administration last month after it failed to secure fresh investment that would have allowed it continue to finance its operations.
The emergence of Covid-19 resulted in a sudden deterioration in the global economic outlook and for fashion in particular, counsel said.
The virus meant that the group was unable to raise the funding it required to allow it continue to trade, resulting in the appointment of administrations and the closure of a large number of its stores in the UK.
The judge, after confirming the provisional liquidator’s appointment, adjourned the matter to a date in early May.
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