Laura Ashley confirmed that it would focus on China for long-term growth as it reported a fall in sales and profits in the first half of its financial year.
The homewares-to-fashion retailer unveiled sales of £122.9m in the half-year to December 31 2018. That’s down by 8.7% from £134.7m at the same time a year before, while like-for-like retail sales were down by 4.2%. Profits before tax and one-off costs came in at zero – from a profit of £4.3m last year – and at the bottom line, after exceptional items, it reported a loss of £1.5m.
The results are the retailer’s first since the arrival of incoming chairman Andrew Khoo who said, on taking over from his father Khoo Kay Peng, that he wanted the retailer to focus on China and online. He told the Press Association that Laura Ashley’s shop numbers could be scaled back by up to 40 stores - falling to 120 from 160. The retailer has closed four stores in the first half of the year - and as of December 31 operated 156 – but says it plans to open two more in the second half of the year.
Today Khoo confirmed that the Asian market would be, “a key focal point for the group’s international expansion while we also explore opportunities in other regions.”
In the UK, Laura Ashley, a Top50 retailer in IRUK Top500 research, operated 156 stores as of December 31. During the half year it closed four stores and plans to open two more in the second half of the year.
Total Laura Ashley UK retail sales came in at £117.2m in the half-year, down by 4.2% on last time. The fall was a result, said the retailer, of those four store closures. Online sales were also 9.7% down at £24.3m. The retailer said its website had been relaunched on a new platform during the first half, and now had features designed to improve the customer shopping experience. The retailer continues to sell from 10 European countries via the UK website.
The retailer is also looking to Asia for growth. New franchised stores have opened in Thailand and India while the retailer has seen its online sales grow in China. They are also expected to grow in Japan after an agreement was finalised with the Itochu Corporation. “This,” said chairman Andrew Khoo, “will ensure the continuing presence and growth of Laura Ashley in Japan.” He added: “The group is also exploring new partnership opportunities on the international front which will provide the thrust for our future growth. In the first half of this financial year, new stores were opened in India and Thailand by our franchise partners. In China, our online business continues to show growth. The Asian market will be a key focal point for the group’s international expansion, while we also explore opportunities in other regions.
“In our drive for international growth, we are committed to preserve the inspirational and distinctive identity of the much-loved Laura Ashley brand. 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.”