Laura Ashley ‘on recovery path’ after it sinks to £14m loss
Andrew Khoo, Laura Ashley chairman says the chain is on a recovery path after a sharp drop in furnishings and online sales saw it fall into the red.
The last twelve 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. We have focussed on the reasons why home furnishings have underperformed and have taken necessary steps to mitigate this, including adding new contemporary product to our ranges. We have taken active steps to listen to our customers and now believe that we are on an appropriate recovery path. We continue to invest in our website and are working with our online service providers to ensure that it is optimised to deliver an enhanced customer experience and to achieve the desired growth,’ he says.
A pre-tax profit of £100,000 became a pre-tax loss of £14m in the year to 30 June.
UK retail sales fell from £236m to £222.9m. Like for like sales dropped 3.5%.
UK sales were split as follows: home accessories 35%, furniture 28%, decorating 18% and fashion 19%.
‘Home accessories sales fell by 0.8% over the same period last year with like- for-like sales up by 1.1%. Our best performing products in this category were lighting, seasonal gifting and bedlinen. We have seen consistent like-for-like growth in this category over recent years and expect that this will continue as we grow and enhance the product ranges,’ says Khoo.
‘Furniture sales decreased by 10.1% over the same period last year with like- for-like sales down by 9.0%. As our most expensive product category, we believe that there has been some impact from weak consumer confidence, particularly at higher price points. We remain confident in the quality of our furniture ranges. We will add more contemporary styles to this category over the coming months.
‘Decorating sales fell by 15.0% with like-for-like sales down 13.7%. This product category has had a difficult year and we have undertaken a thorough review of the entire range. We are introducing new styles and designs which will add modernity but retain the Laura Ashley handwriting. Decorating is central to our brand and our intention is to broaden its customer base and accordingly strengthen the underlying business.
‘Fashion sales for the period to 30 June 2019 increased by 4.2% over the same period last year with like- for-like sales up by 9.2%. This performance is built on a very strong performance in 2018 and we are pleased with the continuity. We are confident that this level of growth can be maintained in what is an extremely competitive product category.’
Online sales dropped by 14.2%.
‘Trading for the seven weeks to 17 August 2019 is performing in line with management expectations. Laura Ashley’s brand is built on beautifully designed, high quality products. We remain resolutely confident in the underlying strength of this much loved brand, in its relevance for today and in our strategies to both maintain and develop it.’