Laura Ashley today reported a fall in retail sales both in stores and online in the first half of its financial year alongside widening pre-tax losses.
The homewares-to-fashion retailer, a Top100 trader in RXUK Top500 research, said group sales of £109.6m in the 26 weeks to December 31 were down by 10.8% from £122.9m a year earlier. Online sales fell by 15.5% to £22.2m while sales on a like-for-like measure – which strips out the effect of store, and business, openings and closures – fell by 10.4%. Sales of home accessories (-14.6% in total), furniture (-7%),and decorating products (-21.5%) fell more shapely than fashion (-2.3%).
Pre-tax losses, after one off costs, came in at £4m, widening from £1.5m a year earlier, after homewares sales came in lower, and as it changed its Japanese franchise partner to Itochu Corporation. However, Laura Ashley detected improvement as sales in the first seven weeks of the current half year stayed flat, rather than declining.
Laura Ashley said earlier this week that its majority shareholder is in talks with its lenders about access to working capital amid falling retail sales and a falling share price. At the time it said that if it could not gain the necessary funding “the company will need to consider all appropriate options” – but the agreement was concluded on Wednesday.
By the end of the half-year, the group operated 153 UK stores, after closing a net two shops. The retailer sells to 10 European countries from its UK website. It also had 80 franchised shops in 20 markets around the world. The retailer now aims to increase its international reach, and to step up its move into hospitality, where it has 10 licensed Laura Ashley tea rooms now up and running, as well as three Laura Ashley hotels. More openings are planned in 2020.
Laura Ashley chairman Andrew Khoo said: “Over the past year there have been well documented market challenges facing the retail sector. Similarly at Laura Ashley, we have seen a combination of factors impact our results, ranging from higher costs largely driven by the Brexit uncertainty, minimum wages and business rates increases.
In the autumn of 2019, we carried out a strategic review of the business to set the future direction of the company and return Laura Ashley to the great British brand that is known and cherished around the world. This review identified six areas of focus: improving our brand and customer strategy, accelerating digital, increasing store productivity, improving products and trading, growth opportunities, and focusing on our organisation and culture.”
New chief executive Katharine Poulter, who had been going to take over in May, has now taken on the role with immediate effect.
Khoo said: “We have embarked on this transformational phase of our journey and we are confident we have the right leadership team and building blocks in place. We are excited about revitalising this distinctive and much-loved brand and to unlock its true potential. I remain extremely positive about the future of this great business and have unwavering confidence that we will be able to achieve our objectives of making Laura Ashley a brand that resonates with today’s customer.”
Image: Screenshot of Lauraashley.com