Furniture and fashion retailer Laura Ashley has reported a decline in furniture sales as ‘weak consumer confidence’ continued to impact big-ticket purchases.
According to its full year results ended 30 June 2019, total furniture sales fell 10.1% with like-for-like sales down by 9%.
Within its home accessories division, sales were down by 0.8%, although like-for-like sales did increase by 1.1%.
Laura Ashley said that lighting was its best performing category, ahead of seasonal gifting and bedlinen.
Overall, total group sales were down from £257.2m to £232.5m, with like-for-like sales falling by 3.5%. Online sales dropped from £59.7m to £51.2m, with like-for-like sales down by 14.2%.
During the year, six stores were closed, reducing its estate to 155 across the UK. The company added that two new stores will open in the year ahead, with ‘five to seven’ set to close as it continues to ‘optimise’ its store portfolio.
Laura Ashley recorded a loss before tax, excluding exceptional items, of £9.8m compared to its profit of £5.6m in 2018. An exceptional charge of £4.5m was recorded in the year of which £1.3m relates to the write off of an investment in a Japanese associate company.
Commenting on the results, Andrew Khoo, Chairman, said: “The last twelve months have proved to be a difficult trading period for the Group and indeed for the retail sector as a whole.
“The primary causes for the year-on-year drop in profit have been the performance of Home Furnishing and that of our website following a re-platforming exercise which took place in November 2018.
“We have focussed on the reasons why Home Furnishings have underperformed and have taken necessary steps to mitigate this, including adding new contemporary product to our ranges. We have taken active steps to listen to our customers and now believe that we are on an appropriate recovery path. We continue to invest in our website and are working with our online service providers to ensure that it is optimised to deliver an enhanced customer experience and to achieve the desired growth.
“As the group expands its international reach, we are delighted to announce that we have recently signed a master licensing agreement with IMG to market and develop the brand in China. This partnership will give us greater access to customers and increase the distribution of our products in the market. We will also be focussing on the Australian market with the first store anticipated to open in Melbourne in 2020.
“We are also delighted with the progress of our growing licensed hospitality business. There are now nine Laura Ashley licensed tearooms and two Laura Ashley licensed hotels. The pipeline of new licenses is very healthy as we enter a new financial period. We are especially pleased with the customer response to this initiative.
“During the last twelve months the Group disposed of its property in Singapore and its Hotel property in Elstree. This has enabled us to eliminate all long term debt and put us on a stronger financial footing for the years ahead.
“As we look to expand our international licensing and hospitality business and optimise UK retail, we are confident in our business strategy which is to create a total lifestyle experience.”