Fashion-to-home furnishings retailer Laura Ashley today said a strong performance from its UK business helped offset losses in Europe during the first half.
The group, best-known for its floral fabrics, said overall losses widened to £1m from £200,000 in 2002. But £700,000 of this year’s figure related to continental Europe.
As well as seeing its UK branches hit by the fall in tourism in the wake of the 11 September attacks in the US, Laura Ashley has felt the effects of the economic downturn in continental Europe – particularly in Germany.
London-based Laura Ashley announced plans in January to pull out of Europe to focus on its domestic market where home furnishing sales have been the star performer.
Sales in UK shops open at least a year rose 5% overall, with home sales up 6% and fashion sales up 2% on a like-for-like basis.
For the six months to July 26, Laura Ashley said turnover was £12m compared with £16.7m in 2002, reflecting the European withdrawal with is expected to be completed by the end of this year.
As well as the shake-up overseas, Laura Ashley said it was undertaking a fundamental restructuring of its fashion business.
The design team has been strengthened, the number of clothing collections in stores will be streamlined and the buying strategy and promotions will be reviewed.
The move is an effort to reverse flagging sales which dropped 4% in total, largely due to a 42% slump in Europe.
UK clothing sales rose 3% during the same period.
Home furnishing sales were also boosted by new branches opened last year, as well as three new edge-of-town home stores in the period.
The growth in the UK came mainly from strong performances from cabinet furniture and accessories.
In the last six months, Laura Ashley opened four new stores and closed eight, most of which were concessions in Homebase DIY shops.
Joint chief executive Ainum Mohd-Saaid said: “We are seeing the benefit of our multi-channel retail approach covering stores, mail order and the internet.
“We are encouraged by the progress we are making in the UK business and look forward to growth in both fashion and home furnishings.”
Current trading figures showed UK fashion sales up 2.2% in the eight weeks to 20 September while home sales rose 3.5%.
The company said the dip in fashion sales was due to the recent hot weather which meant autumn ranges had been left on the shelves.
References: EGi News 30/09/03
