Fashion chain Laura Ashley filed for administration today, putting up to 2,700 jobs at risk, after rescue talks were halted by the coronavirus outbreak.

The troubled retailer had been in talks with stakeholders over refinancing, but it said its 'revised cash flow forecasts and increased uncertainty' mean it will not be able to secure these funds in sufficient time.

Largest shareholder Mui Asia said it was unable to support the retailer with 'financial support in the required timeframe'.

It comes as the coronavirus death toll in the UK rose to 55 and Chancellor Rishi Sunak was poised to announce a multi-billion pound package to stop thousands of other businesses from going bust.  

Laura Ashley said it hired advisers from PwC to oversee the administration today. The retailer operates 150 stores in the UK and employs around 2,700 staff.

Earlier this week, it was reported that it was in discussions about the £15 million loan with private equity fund Hilco Capital to finance its immediate working capital requirements.

Laura Ashley said it had seen an upturn in sales in recent weeks, with trading up 24% year on year for the seven weeks to March 13.

However, it said the Covid-19 virus outbreak has "had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation".

The announcement comes after a challenging period for the clothing and furnishings brand, which saw pre-tax losses balloon to £4 million in 2019.

Sales for the year also plunged by 11% to £109.6 million for the year. Shares in the company plummeted 68.9% to 0.3p in early trading today. 

It has also asked for its shares to be suspended from trading on the London Stock Exchange. 

Founded in 1953 by Welsh fashion designer Laura Ashley and her husband Bernard, the chain became a middle-class favourite in the 1970s and 1980s with its floral prints, and Princess Diana was among a legion of well-heeled fans.

But it has since struggled to attract younger buyers, with a slump in demand for its chintz furniture in particular leading to multi-million-pound losses in recent years.

After a mini-revival in the late 1990s under new owners MUI – backed by Malaysian tycoon Khoo Kay Peng – Laura Ashley has battled to compete with more modern, cheaper rivals such as Zara.