Struggling retailer Laura Ashley will not pay an interim dividend after losses more than doubled in the first half of the year amid a “challenging” trading period.
Laura Ashley reported total group sales of £109.6m, down from £122.9m a year earlier, for the first half of the year.
The decline in total revenue was due to the closure of three stores and weaker consumer confidence, with a like-for-like retail sales drop of 10.4 per cent.
Laura Ashley attributed its loss before tax of £4m, up from £1.5m a year earlier, to lower home furnishings sales and because of revenue disruption caused by a change in its Japanese franchise partner.
The board is not recommending a payment of an interim dividend.
Why it’s interesting
Laura Ashley has been another victim of the gloom shrouding the British high street in recent years.
New chief executive Katharine Poulter will be tasked with implementing the recommendations of last year’s strategic review.
Poulter, who joined as chief operating officer in January, was announced as the new chief executive following the retirement of Kwan Cheong Ng.
The strategic review identified six areas of focus which include improving Laura Ashley’s brand, accelerating digital and improving products and trading.
The retailer is also working on new international partnerships, with a particular focus on the Asian market. Laura Ashley recently concluded a new master licence agreement with Itochu Corporation for the Japan territory.
Yesterday Laura Ashley secured a £20m lifeline after emergency talks with its lender. Following discussions between Malaysian owner MUI Asia and Wells Fargo, access to a working capital facility has now been granted.
Shares were up 26 per cent at 8.30am.
What Laura Ashley said
Chairman Andrew Khoo said:
Over the past year there have been well documented market challenges facing the retail sector. Similarly at Laura Ashley, we have seen a combination of factors impact our results, ranging from higher costs largely driven by the Brexit uncertainty, minimum wages and business rates increases.
In the Autumn of 2019, we carried out a Strategic Review of the business to set the future direction of the company and return Laura Ashley to the great British brand that is known and cherished around the world. This review identified six areas of focus: improving our brand and customer strategy, accelerating digital, increasing store productivity, improving products and trading, growth opportunities, and focusing on our organisation and culture.