Fashion and furniture giant Laura Ashley, which has a factory in Newtown, has announced it is entering administration.

The company said the coronavirus outbreak has had an "immediate and significant" impact on trading.

Laura Ashley announced on Tuesday that its investors were unable to step in with additional funds to keep the iconic Mid Wales business stay afloat, which had been struggling for some time.

The company had seen a big increase in sales in the early part of the new year but still needed to raise £15 million to support trading and its turnaround plans.

Now becuase of the effect of coronavirus on its cash flow and "increase uncertainty" facing the group it now doesn't expect to raise the money that it needs. 

County Times: Laura Ashley factory in Newtown. Laura Ashley factory in Newtown.

In a statement, the company said: "The directors of the company, its key trading subsidiary (Laura Ashley Limited), Premier Home Logistics Limited, Laura Ashley Investments Limited, and Texplan Manufacturing Limited, have concluded that all available alternative options have been explored and therefore, in order to protect creditors, it is necessary to file a notice of intention to appoint administrators in respect of the company and each of the named subsidiaries.  

"Accordingly, the company regrets to announce that the directors of the company, and of the named subsidiaries, have today filed notices of intention to appoint Robert Lewis and Zelf Hussain as administrators. If administrators are appointed in respect of the company, given the group's creditor position, the company is not certain whether there would be any surplus assets available to shareholders of the company."

The homeware and women's fashion brand has stores in Newtown, Shrewsbury and Hereford.

Laura Ashley's first shop was opened in Machynlleth in 1961, and had a factory in Carno. It still has factories on the Mochdre and Vastre Industrial Estates in Newtown.

Reacting to today’s announcement, Montgomeryshire MP Craig Williams said he will speak to the relevant departments in Westminster to see if anything can be done to help the company and its staff.

He said: "This is a very worrying time for everyone. I completely understand the stress and fears of everyone who works for Laura Ashley Ltd and also for their families.

"The government is announcing a raft of measures to support industry and the economy over these uncertain times.

"I will be speaking to the relevant departments in Westminster to see if anything can be done to help with this unfolding situation for Laura Ashley Ltd and its staff."

Former Montgomeryshire MP Glyn Davies has called Laura Ashley's collapse as a "blow to the Mid Wales economy."

He said: "Laura Ashley has been a major part of the transformation of the local economy and the wider Wales economy.

"Its growth was astonishing and hugely important to the rural economy - proving second incomes to many farming families. It was a catalyst for so much other investment in the region. 

"To most it’s an economic blow to the Mid Wales economy. To some of us it’s more than that - an emotional blow to the history of rural Wales."

Newtown mayor Cllr David Selby said he hopes a solution can be found to keep jobs in the town.

He said: "Laura Ashley as a company is the reason I am in Newtown.  I moved to the area in 1988 when I started working in the Mail Order Department on the Vastre estate in Newtown.  I worked for the company for 17 years through good and bad trading times, but the spirit of what once a family company remained.

"There are many families here that have a connection to Laura Ashley, who will be saddened by this news.

"I feel for those who currently work for the company who will be directly affected by the news, particularly when we are living in such uncertain times.  I hope and trust that some sort of solution can be found for the company to keep vital jobs in our town."

The company has suspended trading on the stock market.