Sales fall at Laura Ashley as it clears long-term debt
By Josh White
Date: Wednesday 20 Feb 2019
(Sharecast News) - Laura Ashley Holdings issued its interim results for the 26 weeks ended 31 December on Wednesday, reporting a fall in total group sales to £122.9m from £134.7m year-on-year.
The London-listed textiles firm said total like-for-like retail sales were down 4.2%, while its profit before tax and exceptional items was £0.0m, falling from £4.3m in the first half of the prior year.
Its loss before tax including exceptional items was £1.5m.
On the upside, Laura Ashley said like-for-like sales in its fashion division were up 11.8%, confirmed that all group long-term debt had been cleared, and noted the launch of its new digital platform.
Its expansion in hospitality also continued, with four tea rooms opened and new openings in the pipeline for 2019.
New franchise stores were also opened in Thailand and India.
The board of Laura Ashley Holdings said it was not recommending payment of an interim dividend, in line with the prior year's decision.
"Trading conditions have been difficult during the first six months of the year to 31 December," said chairman Andrew Khoo.
"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.
"Despite these challenges, our fashion performance was strong, achieving like-for-like growth of 11.8%."
Khoo noted that the firm recently launched a new digital platform, which was expected to improve online sales in the years ahead.
He said that improved platform incorporated "enhanced functionality", a better customer interface and advanced technological capability.
"In line with our transformation towards a more lifestyle brand, the group remains committed to further develop the hospitality segment of its business.
"With four tea rooms and a licensed hotel already in operation, we have laid the foundation for the further expansion.
"A number of opportunities are being evaluated, and we expect to see further openings this year."
Following the termination of the master licence agreement for the territory of Japan with Aeon in September, Khoo said a new master licence agreement had now been concluded with Itochu Corporation.
That would ensure the continuing presence and growth of Laura Ashley in Japan, he said.
"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 would be a key focal point for the group's international expansion, Andrew Khoo added, while it also explored 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."
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