- Angela Gonzalez-Rodriguez |
British fashion and homeware retailer Laura Ashley saw its shares lose more than 18 percent at the close of market Tuesday after it issued its second profit warning in six months. The reason? “Demanding” market conditions and a weaker pound.
Laura Ashley disclosed earlier this week that its full-year earnings would take a 2.8 million pounds hit on the back of a revaluation of one of its freehold properties, compounding challenging market conditions which were already plaguing the retailer, reported ´The Times´. Specifically, the retailer said in a market announcement that “The results will show an exceptional 2.8 million pounds impairment charge due to the revaluation of a freehold property owned by the group. In addition, and as previously disclosed, trading conditions have continued to be demanding.”
On a related note, the retailer said that 22 of its concessions would close by summer 2017 following the Bunnings acquisition of Homebase, but said it was taking steps to “minimise the impact to profit” on the back of those closures.
As a result, “The board of the company therefore expect net pre-tax profits for the year ended June 30th, 2017, will now be materially below market expectations.”
Following the announcement, Laura Ashley shares were down more than 18 percent. It´s worth recalling that the company’s stock price has declined notably over the past year, having lost 60 percent of its value since August 2016.
Earlier this year, in February, Laura Ashley’s six-month financial release showed the consequences of currency fluctuations and the implementation of the new minimum wage, which altogether translated into a 6 percent rise in operating costs to 52.3 million pounds. Back then, the fashion group issued a profit warning after reporting a 29 percent nosedive in