Laura Ashley shares plunge 26% on profit warning
Home furnishings and clothing retailer Laura Ashley has issued a profit warning after reporting disappointing Christmas trading figures.
It warned that full-year profits would be lower than expected because of “continued market challenges” and the weakening of the pound.
Like-for-like sales fell 0.5% for the 26 weeks to 31 December, while pre-tax profit nearly halved to £4.3m.
Its shares were down 26% at one point before recovering to stand down 4%.
However, Laura Ashley, which is owned by Malaysian firm Mui Group, saw online sales saw grow by 5.1% during the period.
Laura Ashley chairman Khoo Kay Peng said the retailer hoped the launch of a new digital platform in the second half of 2018 would help boost its offerings.
The retailer’s two UK boutique hotels reported steady growth of £1.2m for the period, while its Laura Ashley-furnished “Tea Room” experiences in other hotels have also done well.
Laura Ashley intends to develop and expand the two concepts as licensing models, both domestically and internationally.
After the termination of a licensing agreement with Aeon Holdings in Japan, Taiwan and Hong Kong, Laura Ashley is now once again in possession of the brand’s master licensing rights.
“The Laura Ashley brand has been much-loved in these territories for over 30 years, and we see an exciting opportunity to build on this with the master licensing rights back under our management,” said Mr Khoo.
The retailer said it also hoped to expand its presence in overseas markets after successfully entering the Chinese market, and after acquiring a partner in Thailand to help develop its brand further in south-east Asia.
Source by BBC