Laura Ashley’s florals fall flat as it expands into tearooms and hotels
Laura Ashley today added its name to the list of established shopping brands that are struggling to make ends meet.
It 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, which has branches across the West Midlands, Staffordshire and Shropshire, revealed it made a pre-tax loss of £14.3 million in the year to June 30.
That figure compares 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 business has a major factory at its base in Carno, Mid Wales, where it was formed by Laura Ashley with her first production line in 1961. The last figures show total group sales were down 9.6 per cent to £232.5 million, with like-for-like retail sales falling 3.5 per cent.
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 nine per cent and 13.7 per cent respectively.
Home accessories, which accounts for the biggest slice of UK sales, rose by 1.1 per cent on a comparable basis.
But comparable fashion sales were up 9.2 per cent.
Meanwhile, the relaunch of the website led to online sales falling 14.2 per cent.
Elsewhere the group is growing its hospitality business with launches in the West Midlands. It has nine licensed Laura Ashley tea rooms, including branches in Solihull and Coventry, 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.