Free «Funds from Sale of Shares» UK Essay Sample

Funds from Sale of Shares

The company expansions were driven by the availability of funds from sale of shares. After the death of its main founder, Laura Ashley, the company was made public by selling shares. Due to the popularity and greatness records that the company possessed, it received a lot of support and this raised its demand causing a 34 times over-subscription. A lot of money was raised in the process and with the expanding trends of globalization being recorded in most parts of the world; Laura Ashley wanted to increase their market base as well (Goodrum 2005). The company had received a sizeable market share from the United States and this prompted the management to consider expanding into the region. It was here that the decision to start warehouses and shops in the US started.

Unfortunately, the period of extension coincided with that of economic recession in Europe. There was a major economic difficulty among the United Kingdom companies which wade Laura Ashley no exception (Ilmberger 2002). Their investments did not pick up as earlier on expected. The death of Laura Ashley was also a major loss to the company. She was the main thinker and innovator to the designs assisted by her son. After her death, the son could not continue with the creativity and there products grew less competitive in the market. The other companies in the US were posing a big threat and little sales were being recorded which to increased losses. This is where the company woes started, never to get any better in the ten years that followed after 1989. For four years, the company did not record any profit. This streak ended in 1993 when they made their first small profits of 3million pounds, which was insignificant to a company that had a turnover of over 300 million pounds. Despite the profit which was expected to rise in the years that followed, there was a disagreement between the board and the then CEO decided to quit after the first profits was realized after a 4year wait since 1989.


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