Laura Ashley profits wiped out as furniture sales plummet
The brand is planning expansion in Asia and a smaller footprint in the UK.
Sales at Laura Ashley have dropped as the fashion and home brand grapples with tough high street conditions and plans an overhaul of its strategy.
Total like-for-like retail sales were down 4.2% in the 26 weeks to December 31.
The company’s profit before tax and exceptional items was wiped out to zero.
Sales in the fashion division showed positive momentum, climbing 11.8% on a like-for-like basis.
In our drive for international growth, we are committed to preserve the inspirational and distinctive identity of the much-loved Laura Ashley brand Andrew Khoo
But furniture sales dropped by 14.4%, while decorating was down 13.5%.
In December the Press Association revealed that the chain, which had 156 UK stores by the end of last year, will cut around 40 more sites as part of an ongoing strategy to slim down the estate.
It comes after Andrew Khoo succeeded his father Khoo Kay Peng as chairman of Laura Ashley’s owner last year, with a fresh vision for the brand which includes expansion in China and developing the hospitality segment of the business.
Mr Khoo reiterated his plans in Wednesday’s results, saying a number of new Laura Ashley tea rooms and hotels are likely to open this year.
We remain of the view that the brand has potential for further international expansion, coupled with additional online growth Cantor Fitzgerald analysts
He added that the Asian market will remain a key focal point in the group’s international expansion, following new store openings in India and Thailand during the first half.
“In our drive for international growth, we are committed to preserve the inspirational and distinctive identity of the much-loved Laura Ashley brand,” he said.
“Having eliminated all of our long-term debts, we are now better placed to deal with the current headwinds and to move the business forward.”
Shares in the company were down 4% in early trading.
Analysts at Cantor Fitzgerald cut their expectations for the company, forecasting an adjusted loss before tax and exceptional items of £700,000 for the full year.
But they said the acceleration in clothing sales and planned brand development were encouraging.
“We remain of the view that the brand has potential for further international expansion, coupled with additional online growth,” they said.