Stores boost for Laura Ashley

Sep 18 2007 by Iain Laing, The Journal

CLOTHING and home furnishings retailer Laura Ashley claimsimprovements to its stores helped boost first half profits.

Pre-tax profits rose by a third to £4m during the 26 weeks to July 28, while total sales rose 6.9% to £113.9m as the firm benefited from new store openings since last year.

The group has 196 sites in the UK, up from 178 a year ago, but added that the impact of revisions to its portfolio hit UK like-for-like sales, which slipped by 7.1%.

Laura Ashley said like-for-like sales, excluding the impact of its store improvement programme, were down by 3.9% after flat furniture sales during tougher economic conditions on the high street. The group said the strong performance had been maintained into the second half with sales up by 4.5%, although the ongoing store programme continued to impact like-for-like sales as moves to bigger sites resulted in more than one store open in certain areas.

It added that while retail conditions are set to remain tough on the high street, it believed improvements, combined with increased operational efficiency, should lead to growth in profitability during the remainder of the year.

Furniture sales were impacted as consumers held off buying “big ticket” items amid rising interest rates.

However new ranges helped boost performance.

Home accessories saw sales growth of 8.7% on its bedding ranges, while also benefiting from strong gifts, storage and jewellery boxes sales. Linen and knitted dresses also helped lift fashion sales.

The group’s fashion division saw the conversion of home only stores into mixed product sites, while tighter stock control saw a pick-up in margins.

Printed wallpaper and silk curtains boosted decorating sales, which accounts for 25% of the company’s revenues.

Franchising revenues saw declining sales in the Middle East, falling to £9.6m. There are 206 franchised stores in 28 countries worldwide.