Laura Ashley today said difficult trading in the home furnishings sector had contributed to a further sales slump.
Same-store sales across the group were 11.6% lower in the 24 weeks to 15 January – worse than the 10.1% decline for the 50 weeks to that date, leading shares to fall 6%.
But the troubled company, which has lost both its joint chief executives in the past two months, said cost cutting and margin improvements should leave annual profits in line with expectations.
Laura Ashley, best known for its floral designs, said its home furnishings division saw a 4.1% fall in like-for-like sales, compared with a 0.1% rise over the 50 weeks.
It said: “In line with the home furnishings sector as a whole, we have experienced a difficult trading environment and increased competitiveness.”
A decision to rely less on promotional activity also contributed to the performance of the division, which accounts for three-quarters of sales.
Same-store sales at Laura Ashley’s clothing arm were 28.2% lower, a slight improvement on the 31.2% decline for the 50-week period.
Profit margins increased at both divisions.
The London-based company launched a turnaround programme last year and overhauled its fashion division in a bid to halt flagging sales, but has continued to report challenging conditions.
The cost cutting has included factory closures in mid-Wales and cuts at the group’s London head office, which amounted to 450 redundancies.
Chief executive Ainum Mohd-Saaid recently announced she was stepping down for personal reasons – just a month after co-partner Rebecca Navarednam left the company.
Malaysian retailer Lillian Tan will take over from Mohd-Saaid on 1 February
Analysts are expecting pre-tax profits for the full year to come in between £3.6m and £4.2m. Last year it returned to the black with profits of £3.1m.
Stockbroker Seymour Pierce edged its estimates down from £4m to £3.8m.
Shares fell 0.75p to 11p.
References: EGi News 20/01/05
