Laura Ashley sales hit by weather
Fashion and homewares retailer Laura Ashley has reported a fall in first half profits as sales were impacted by the cold spring weather and the subsequent summer heatwave.
In the 26 weeks to 27 July 2013, total group sales dropped 5.6% to £137.3 million while underlying pre-tax profits, excluding exceptional items, fell to £7.8 million from £8.3 million in the same period in the prior year.
Commenting on the results chairman Tan Sri Dr. K P Khoo said: “The first half of 2013 has proved to be a challenging one for us. A period of prolonged cold weather impacted fashion sales as customers continued to wear winter clothing and did not buy into Spring Summer ranges later in the season. The subsequent switch into a long spell of very hot weather, particularly throughout July, had a negative impact on Home Furnishing sales. This contributed to an overall like for like reduction in retail sales of 2.2% and a profit fall (before exceptional items) of £0.5 million to £7.8 million.
In the UK, where Laura Ashley operates 209 stores, total retail sales declined by 5.9% to £120 million with like-for-like sales down by 2.2%. Total e-commerce sales were down 3.7% on last year and now represent 16.4% of sales compared to 16% in the previous year.
Never Miss a Retail Update!The retailer opened two new stores in the period and closed five as it continued to implement its store alignment programme.
Within Laura Ashley’s four main product categories, sales in fashion, home accessories and decorating all fell although furniture sales increased by 0.5% with like-for-like sales up 0.7%.
Franchise and licensing revenue dropped by 3.6% to £15.1 million in the period. As of 27 July 2013, the retailer had 280 franchised stores compared to 263 at the start of 2013. Additional stores were opened in Japan, Australia, South Korea, Taiwan, Hong Kong, Spain and Bulgaria and there are plans to open new stores in the Baltics, Poland and Armenia in the second half of the year.
Tan Sri Dr. K P Khoo continued: “As we enter the second half of 2013, we remain confident in both the quality of our product ranges and the underlying strength of our brand, which celebrates its 60th anniversary this year. Traditionally our performance has been weighted to the second half with particular emphasis on the final months of the year. We will continue to adjust our store portfolio to ensure it delivers a profitable core business and outside the UK, international expansion remains a key focus.”
