Laura Ashley slips, blames bad weather

25th Sep 2013 14:10

Unseasonable weather patterns disrupted first half sales at fashion and furnishings retailer Laura Ashley, hitting the shares hard.Total group sales slipped 5.6% to £137.3m in the 26 weeks to July 27th, with like-for-like retail sales down by 2.2%, although management emphasised their confidence and pointed to the group's historical second-half weighting.Chairman Tan Sri KP Khoo, the Malaysian tycoon who owns 60% of the shares through the MUI Group conglomerate and his Bonham Industries vehicle, admitted the first half was a challenging one."A period of prolonged cold weather impacted fashion sales as customers continued to wear winter clothing and did not buy into Spring Summer ranges later in the season."The subsequent switch into a long spell of very hot weather, particularly throughout July, had a negative impact on Home Furnishing sales."Together this contributed to the fall in like-for-like sales from its 209 stores, with even online sales falling, and a 6% profit decline to £7.8m.Of the four revenue categories, fashion sales declined the most, 6.9%, with home furnishings (including lighting, beds, throws and cushions) down 2.3%, decorating (fabric, curtains and paint) down 1.7% and furniture sales flat.Moreover, trading for the first eight weeks of the second half was down 1.3% like for like, which the company said reflected the "continued underperformance of the fashion category". Laura Ashley is pursuing a store "realignment" programme and, although it opened two new stores, it closed five during the first half, reducing total selling space by 2.4% to 786,000 sq ft.Work also continued on developing the company's website, after ecommerce fell 3.7% on the same period last year to represent 16.4% of total UK Retail sales.Other developments included the opening of the 49-bedroom Laura Ashley hotel, The Manor, on August 1st to "extremely positive" reviews.Khoo said management remained confident in both the quality of the product ranges and the underlying strength of the brand, which celebrates its 60th anniversary this year. "Traditionally our performance has been weighted to the second half with particular emphasis on the final months of the year. "We will continue to adjust our store portfolio to ensure it delivers a profitable core business and outside the UK, international expansion remains a key focus."Recovering somewhat from their early fall, shares in Laura Ashley were down 8.6% to 24p at 14:45 on Wednesday. OH