25th Sep 2013 10:27
LONDON (Alliance News) - Laura Ashley Holdings PLC Wednesday said a drop in sales and profits in the first half of the year was a result of colder weather hitting fashion sales, and a hotter UK summer responsible for a fall in home furnishing sales.
The clothing and home retailer maintained its interim dividend at 1.00 pence per share, and said that trading so far in the third quarter was down 1.3% on a like-for-like basis, as its fashion category continued to underperform.
It said its pretax profit fell 6% to GBP7.4 million, from GBP8.3 million a year earlier, partly due to a fall in sales, and exceptional costs of GBP0.4 million during the period.
Laura Ashley said that group sales in the six months to July 27 were down 5.6% to GBP137.3 million, compared to GBP145.5 million a year earlier, due to a combination of weather factors affecting the sale of its goods. It said that like-for-like retail sales fell by 2.2% over the same period, and e-commerce revenue was down 3.7%.
The company reported a gross margin improvement of 1.3%.
The group said that its furniture division contributed to 31% of total UK sales, followed by home accessories with 26%, decorating with 24%, and its fashion division lagging behind with 19%, having fallen 6.6% on a like-for-like basis.
It said that franchise and licensing revenues fell by 3.6% to GBP15.1 million in the first half of the year.
The company said that by the end of the first half its UK portfolio comprised of 209 stores, as its total selling space decreased by 2.4%, as a result of opening two new stores but closing five. It said that international expansion remains a key focus, as well as driving sales from its multi-channel business.
Laura Ashley said that it had a total of 280 franchise stores in 28 territories worldwide as at July 27, with additional stores opened in Asia, Australia, Spain and Bulgaria. It said that new agreements have been signed in the Baltics, Poland and Armenia, and store openings are planned in each of these territories during the second half of the year.
The company said it also launched a 49-bedroom hotel on August 1, with each bedroom individually designed using Laura Ashley home furnishings. The hotel is in Elstree, 13 miles north of London.
Laura Ashley shares were down 9.0% at 23.90 pence per share Wednesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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