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Laura Ashley H1 sales and profit decline

By Prachi Singh

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Business

For the 26 weeks to December 31, 2017, Laura Ashley Holdings Plc reported sales of 134.7 million pounds (189 million dollars), a fall of 7.7 percent. This overall fall, the company said, was primarily due to the closure of 25 stores during the second half of last year. Like-for-like retail sales for the period fell by 0.5 percent. Total ecommerce sales grew to 26.9 million pounds (37.7 million dollars), an increase of 5.1 percent. Gross margin fell to 38.5 percent and due to the impact of the weakening of sterling, group profit before taxation declined to 4.3 million pounds (6 million dollars).

Commenting on the company’s first half performance, Laura Ashley Chairman Tan Sri Dr Khoo Kay Peng said in a statement: “Trading conditions have continued to be challenging during the first six months of the year. The impact felt due to the weakening of sterling, year on year, was the most significant single factor in the fall of profit before tax. The board have reviewed the first half results and forecasts for the remainder of the year to June 30, 2018 and, given the continued market challenges, considers that net pre-tax profit for the year will fall below market expectations.”

Review of Laura Ashley’s H1 results

As at December 31, 2017, the property portfolio in the UK consisted of 161 stores. During the reporting period, the company closed six stores. Total UK retail sales of 122.9 million pounds (172.6 million dollars) were recorded during the period compared to 133.4 million pounds (187.4 million dollars), in the same period of 2016. On a like-for-like basis, UK retail sales fell by 0.5 percent. Total ecommerce sales reached 26.9 million pounds (37.7 million dollars) against 25.6 million pounds (35.9 million dollars) in the first half of 2016.

Fashion sales including adult fashion, fashion accessories and perfumery, for the 26 weeks decreased by 1 percent over the same period last year with like-for-like sales up 1.2 percent.

On February 2, 2018, the company announced that, on September 17, 2018, the master license agreement with Aeon will be terminated and, as a result, license rights will revert back to the UK for Japan, Taiwan and Hong Kong. In the reporting period, international operations contributed 6.7 percent of total group revenue. At December 31, 2017, there were 246 franchised stores in 29 territories worldwide. Franchise and licensing revenue of 9.9 million pounds (13.9 million dollars) was recorded during the first half against 10.2 million pounds (14.3 million dollars) in 2016, due to the performance of the franchise business reflecting sluggish trading conditions in some of the franchised territories.

Licensing revenues increased 21 percent and the company signed a new licence partner for the Thailand market during the period.

Picture:Laura Ashley website

Laura Ashley