Laura Ashley swings to loss as furniture business struggles
Fashion sales were up at the high street retailer.
Laura Ashley has swung to a loss as a continued decline in its home furnishings business and changes to its website weighed on sales.
The high street stalwart revealed it made a pre-tax loss of £14.3 million in the year to June 30, compared to a profit of £100,000 this time last year.
Excluding exceptional items, the loss before tax came in at £9.8 million versus last year’s £5.6 million profit.
The last 12 months have proved to be a difficult trading period for the group and indeed for the retail sector as a whole Andrew Khoo, Laura Ashley chairman
Total group sales were down 9.6% to £232.5 million, with like-for-like retail sales falling 3.5%.
Andrew Khoo, the brand’s chairman, said: “The last 12 months have proved to be a difficult trading period for the group and indeed for the retail sector as a whole.
“The primary causes for the year-on-year drop in profit have been the performance of Home Furnishing and that of our website following a re-platforming exercise which took place in November 2018.”
Within the home category, furniture and decorating were hit especially hard with like-for-like sales down by 9% and 13.7% respectively.
Home accessories, which accounts for the biggest slice of UK sales, rose by 1.1% on a comparable basis.
But comparable fashion sales were up 9.2%.
Meanwhile, the relaunch of the website led to online sales falling 14.2%.
Elsewhere the group is growing its hospitality business, with nine licensed Laura Ashley tea rooms and two hotels now in operation.
The company said it had made “good progress” on expanding the project internationally.
Outside of the UK, franchise and licensing revenue was down due to the loss of business in Japan after ending its relationship with retail partner Aeon in September.
A new partner has since been appointed for Japan, while another will develop the brand in China, where Mr Khoo has previously said he would like to roll out stores.
Shares in the company were down 5% in early trading on Thursday.
Julie Palmer, partner at Begbies Traynor, said: “Until consumers are given the confidence to start parting with their cash or it sees some hope from overseas markets, the business will continue to struggle.
“But it cannot rely on outside factors, it needs to find its own solutions across design and infrastructure if it is to appeal to a new consumer market. ”