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Laura Ashley sales down 2.5 percent, issues profit warning

By Prachi Singh

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Management

Laura Ashley Group said that the 26 weeks period to December 31, 2016, total group sales were 146 million pounds (182 million dollars) compared to 149.8 million pounds in the period ending January 30, 2016, representing a fall of 2.5 percent. The company's board feels that due to continued market challenges, net pre-tax profit for the year will fall below market expectations.

Commenting on the results, Tan Sri Dr Khoo Kay Peng, Chairman, said in a media release, “Trading conditions have been demanding during the first six months of the year ending 30 June 2017. The board has reviewed the first half results and forecasts for the remainder of the year to 30th June 2017 and, given the continued market challenges, feels that net pre-tax profit for the year will fall below market expectations.”

Retail like-for-like sales in UK decline

Like-for-like retail sales fell by 3.5 percent, while ecommerce sales grew to 25.6 million pounds (31 million dollars). Like-for-like ecommerce sales grew by 2.1 percent.

As at December 31, 2016, the property portfolio in the UK comprised of 190 stores including 115 mixed product stores, 48 home stores, 25 concession stores, one gifts & accessories store and one clearance outlet. During the reporting period, two stores were closed and none were opened. The company said, 22 concession stores in Homebase will be closed by June 2017 following the acquisition of Homebase by Bunnings.

Total UK retail sales of 133.4 million pounds (166 million dollars) were recorded during the period against 136.7 million pounds (170 million dollars) for 26 weeks to January 30, 2016. On a like-for-like basis, UK retail sales fell by 3.5 percent. Total ecommerce sales rose to 25.6 million pounds (31 million dollars) during the period. Already delivering to eight European countries, the company recently added delivery to the Czech Republic and Hungary. The company also launched its digital platform in China in November 2016.

Laura Ashley fashion sales decline 5 percent

The UK business is split into four main categories. For the 26 weeks ended December 31, 2016, the company said, relative split of UK sales was as follows: home accessories 34 percent, furniture 30 percent, decorating 20 percent and fashion 16 percent. For the period, the company fashion category that includes adult fashion, fashion accessories and perfumery reported sales decrease of 5 percent over the same period last year with like-for-like sales down 3.2 percent.

International Operations

Among other categories, furniture segment sales decreased by 9.3 percent with like-for-like sales down 8 percent, home accessories sales, however increased by 0.3 percent with like-for-like performance up by 2.5 percent. Decorating sales for the period fell by 7.7 percent with like-for-like sales down by 6.4 percent.

Annual pre-tax profit expected to fall below expectations

The company said, since trading conditions have been demanding during the first six months of the year ending 30 June 2017, the board feels that net pre-tax profit for the year will fall below market expectations. Like-for-like sales for the six weeks to February 11, 2017 were 0.6 percent down on last year.

The board recommended the payment of an interim dividend of 0.5 pence per share.

Picture:Laura Ashley

Laura Ashley