Troubled retailer Laura Ashley plunged into the red today and warned it might not get back into the black this year, as it admitted it had tried to expand too fast.
The company opened 35 shops in the UK between July 1996 and July 1997, mainly through opening outlets inside Sainsbury’s Homebase DIY stores.
The company reported a half year pre-tax loss of £4.5m, down from a profit of £5.2m at the same stage last year. Two profits warnings earlier this year had braced investors for the bad news.
Last month Laura Ashley was forced to close two textile factories in Wales at a cost to the company of £1m and the loss of 190 jobs. It has since announced the sale of both plants, securing jobs for 149 people.
Turnover in the six months to July rose from £156m to £174m, but profits failed to keep pace. Shareholders will not get a half year dividend payout.
Chief executive Ann Iverson, who two years ago was brought in from Mothercare, said: “The turnaround of the past two years has improved the company in several ways and delivered £26m in pre-tax profits over that period. However, we can now see that we moved ahead too fast, too soon and did not have the proper infrastructure in place to support growth and expansion.”
EGi News 26/09/97
