Laura Ashley warns on full-year performance amid market turbulence
Laura Ashley has warned its full-year performance will fall short of market expectations after posting a drop in sales for its interim results.
The homeware chain, which is owned by Malaysian United Industries, suffered a 4.2 per cent decline in like-for-like retail sales for the 26 weeks to the end of December.
Read more: Laura Ashley shares fall as it prepares to shutter 40 UK stores
The company failed to turn a profit over the period, despite posting £4.3m in profit before tax the previous year. Shares in Laura Ashley tumbled more than 20 per cent in early trading.
Chairman Andrew Khoo said trading conditions had been difficult over the six-month period.
“Given the continued market turbulence and having reviewed the revised management forecast for the second half year, the board now holds the view that the performance for the entire year will fall short of market expectations,” he said.
Sales were also impacted by the termination of a licence with a Japanese partner, though the firm said it has since signed a new deal. Despite the poor overall retail performance, like-for-like fashion sales grew 11.8 per cent.
Chief financial officer Sean Anglim told City PM: “Retail is difficult at the moment, no question about that.
“That’s why we’ve take the actions we have and tried to be in as robust a position as possible. We have to offer customers the right product for right price, because we don’t want to lose customers.”
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Laura Ashley said it is eyeing an expansion of its hospitality division, with new openings of tea rooms planned for 2019.
In December it emerged the retailer is set to close 40 more stores across the UK as it looks to expand in Asia. A spokesperson for Laura Ashley said there is no timetable for store closures and no list has been prepared.