Fashion and homeware retailer Laura Ashley has reported a 98% slump in profits amid “challenging” trading conditions.
In the year to 30 June, annual pre-tax profits fell to £100,000 from £6.3m the previous year.
The retailer’s bottom line was hit by an accounting write-off on the sale of a property in Singapore.
Total like-for-like retail sales dropped by 0.4% – but clothing sales rose by 9.7%, while like-for-like online sales were up by 4.1%.
Chairman Khoo Kay Peng said he was “disappointed” by the fall in profit which he blamed on a “changing retail landscape”.
But he said he was “encouraged” by the growth of the online business and said the firm would be launching a new digital platform in the weeks to come.
He added: “Laura Ashley’s brand is built on beautifully designed, high quality products.
“Whilst the trading environment will continue to be challenging, we remain resolutely confident in the underlying strength of this much-loved brand, in its relevance for today’s consumer and in our strategies to both maintain and develop the brand and the company.”
In the UK alone, like-for-like sales of furniture fell by 4.1%, which Laura Ashley said was down to consumers delaying “the more expensive purchase of a new settee or bed”.
The firm said furniture “is our most highly priced category” and that it was planning on “adding a selection of more competitively priced products” to its range “but will maintain the overall quality and diversity of choice which we now offer”.
During the year, the retailer, known for its floral fabric designs, closed eight of its 168 UK stores and opened one. It plans to open two new stores and close a further five in the next year.
Future plans also include expanding its new hotel venture, adding to its tea rooms chain, and taking the business to Thailand where two stores are set to open in the next financial year.
The markets were reassured by Laura Ashley’s plans, with shares climbing 9% in early Wednesday trading.
From – SkyNews