Shares in Lowndes Queensway suspended at company's request

the company's request as it sought a refinancing package from its

backers and main shareholders.

A statement said that the company was in the final stages of

discussions with its bankers and principal shareholders with regard to

raising further finance and rescheduling existing facilities. Repayments

against Lowndes Queensway's medium-term loan are ahead of schedule. But

further finance is needed to fund the investment required ''for the

continued implementation of its strategy and to provide further working

capital following a period of poor trading''.

Lowndes Queensway was formed by the leveraged takeover of Harris

Queensway a year ago and has been struggling right from the start.

Trading conditions were not good last year and since then the impact of

high interest rates on the housing market and on High Street spending

generally have made the going even tougher.

The latest survey from the CBI and the June and July retail sales

figures show all too clearly what retailers are up against and the

position is not going to get any better in the short term with high

interest rates here to stay for a while. What is currently reckoned to

be good medicine for the country is certainly not good for the High

Street stores. And Lowndes Queensway is at the more vulnerable end of

the market.

Since the takeover last year, Lowndes Queensway has made a series of

disposals, including Harveys and Poundstretchers which raised #107m. It

also sold Hamleys, the prestigious London toy store, though the price

raised of #22m was well below trade expectations of around #30m. The

disposals meant that the company was left with its core furniture and

carpet stores businesses, part of the group's stated strategy.

The trouble is, of course, that the timing has proved almost

disastrous. Harris Queensway was bought at virtually the top of a market

which has been going downhill steadily ever since. Recently stockbroker

James Capel reduced it profit forecast for Lowndes for the year to the

end of January from #12m to about #6.5m.

During the takeover of Queensway, Lowndes Queensway's brokers

estimated that the shares would have been worth 100p if they were quoted

at the time. Yesterday's suspension price was just 221!/;1/p.

The company stressed yesterday that its strategy is well advanced and

pointed to key elements including new trading formulae being introduced

in Carpetland and Queensway stores. One hundered stores will be

refurbished and one hundred re-signed by November. The results are said

to have been extremely encouraging, with cash paybacks envisaged in

under one year.

In addition, progress on direct distribution in the furniture division

is ahead of target. And cost reduction initiatives implemented to date

are expected to generate savings of #20m on an annualised basis.

Current trading, meantime, remains difficult as a result of the

continued high level of interest rates, but ''signs of improvement have

been noted in recent weeks''. And the management says it remains

confident in the strong profit potential of the company. Details of the

refinancing are expected within the next few days.