Laura Ashley posts loss of 1.5 million pounds in H1, revenues drop 8.7 percent

For the 26 weeks to December 31, 2018, total sales at Laura Ashley Holdings Plc were 122.9 million pounds (160.3 million dollars), a fall of 8.7 percent, which the company said was primarily due to the closure of four stores during the period, like-for-like retail sales drop of 4.2 percent and the termination of the master license agreement with its previous Japanese partner. Margin rate fell by 0.3 percent against the same period last year and the company reported loss of 1.5 million pounds (1.9 million dollars) for the first half year against profit before tax of 4.3 million pounds in the same period in 2017.

“Trading conditions have been difficult during the first six months of the year. 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,” said Andrew Khoo, the company’s Chairman in a statement.

Review of Laura Ashley’s first half results

As at December 31, 2018, the group operated 156 stores in the UK, comprising 106 mixed product stores, 47 home stores, one concession store, one gifts & accessories store, and one clearance outlet. During the reporting period, four stores were closed and none were opened. The company said, two store openings are planned for the second half of the year.

Total UK retail sales for the period were 117.2 million pounds (152.9 million dollars), while on a like-for-like basis, UK retail sales fell by 4.2 percent. Total ecommerce sales fell 9.7 percent to 24.3 million pounds (31.7 million dollars).

Among the product categories, during the period under review, fashion sales increased 7.2 percent with like-for-like sales up by 11.8 percent, home accessories sales increased by 0.3 percent with like-for-like performance up by 1.5 percent, furniture sales decreased by 15 percent with like-for-like sales down 14.4 percent and decorating sales fell by 14.2 percent with like-for-like sales down by 13.5 percent.

In the first six months, new franchise stores were opened in Thailand and India with further openings planned for 2019. The Japanese master licence agreement with Aeon Holdings was terminated on September 17, 2018 and the company simultaneously signed a master licence agreement with Itochu Corporation. In December 2018, the company’s Australian master licensee went into administration and now Laura Ashley is pursuing a plan to maintain its presence in Australia. In the reporting period, international operations contributed 6.7 percent of total group revenue and at December 31, 2018, there were 90 franchised stores compared to 246 at December 31, 2017 in 26 territories worldwide.