Outlook: Laura Ashley

THE TALE of woe that is Laura Ashley just goes on and on. The latest bulletin from this Incredible Shrinking Company includes the admission that without a special banking dispensation, the group would not have been able to avoid insolvent liquidation.

To secure the banks' blessing for this act of faith, it has had to give away its American stores for 60p and launch a deeply discounted rescue rights issue that few investors would be advised to subscribe to.

One wonders what MUI, Laura Ashley's low-profile Malaysian backers, must make of it all. Their involvement with the company has been a financial disaster with the share price losing more than half its value in a single year. Its first choice as chief executive came and went with barely a hello. In the circumstances, recruiting the power of prayer to the board in the form of Pat Robertson, the American TV evangelist, was perhaps the only strategy left.

The tragedy of Laura Ashley is that somewhere, in some form, there is a brand with some value trying to get out. The sad fact is that over successive years the company was wilfully expanded when the group's creaking infrastructure was plainly too weak to cope.

Now MUI is faced with reducing the company back to a more manageable scale in the full glare of the stock market. Given that under the terms of the right issue the Malaysians could end up with 60 per cent of the company, perhaps it would be kinder for all concerned if they bought the remainder and took the company private.