Laura Ashley Announces Double-Digit Sales Decline; New CEO In Place

Laura Ashley Holdings plc announces its interim results for the 26 weeks to 31 December 2019. 

Summary 

- Total Group sales of £109.6m (26 weeks to 31 December 2018: £122.9m)
- Total like-for-like retail sales down 10.4%
- Loss before tax but after exceptional items £4.0m (2018: £1.5m)
- Hospitality expansion continues with ten licensed Laura Ashley tea rooms and three licensed Laura Ashley Hotels. New openings are in the pipeline for 2020
- The Board is not recommending payment of an interim dividend (December 2018: 0.0 pence)
- The Group, under IFRS 16 "Leases", will report using the modified retrospective method for 2019/2020 financial year whereby comparatives will not be restated. The incremental borrowing rate of 0.21% has been applied.

"There have been market challenges for our business which have impacted these results during the current financial year. The decline in total revenue was due to the market headwinds and weaker consumer spending during the period, which led to a decline in sales of bigger ticket items. Whilst these results are disappointing, we believe that with the right focus and support, Laura Ashley has a strong future and can be successful again.

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 includes reconnecting with our traditional values and our strong British heritage. We have already started to implement the recommendations of the Review, with the appointment of a new leadership team and changes to our product ranges. We have further to go but are confident we now have the right leadership team and building blocks in place.

Going forwards we are excited about  the potential for our distinctive and much-loved Laura Ashley brand and the market opportunities both in Great Britain and internationally." 

Chairman's statement - Andrew Khoo

"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 organization and culture.

We have already started to implement the recommendations of the Review, and this has started with the appointment of a new leadership team. Katharine Poulter, who brings a wealth of retail expertise, joined us as COO in January 2020 and will take on the role of CEO with immediate effect. Sagar Mavani was appointed CFO in 2019 and brings a fresh perspective and added financial experience during this transitional phase of the business.

We are focused on developing Laura Ashley as a true lifestyle brand that embraces and reconnects  with our traditional values and our strong British heritage.

We are already making changes to our product range, which will not only be recognisable as iconic, exclusive Laura Ashley designs and prints, but also products that are desirable today and represent timeless quality. We have new and exciting partnerships with brands like Barbour, Rag & Bone and Urban Outfitters and expect to see these developing throughout 2020.We are continuing to champion great British design and craftmanship and are working with local suppliers in a sustainable manner. We remain committed to our roots in Wales and as an employer in the region.

Our strong brand loyalty is seen through the hospitality segment of its business  and the licensing model. With ten tea rooms and three licensed hotels already in operation, we have laid the foundation for the further expansion. A number of opportunities are currently being evaluated and we expect to see further openings this year.

A new Master Licence Agreement was concluded with Itochu Corporation for the Japan territory to ensure the continuing presence and growth of Laura Ashley in Japan.

The Group is also exploring new partnership opportunities on the international front which will provide the thrust for our future growth. The Asian market will be a key focal point for the Group's international expansion, while we also explore opportunities in other regions.

As announced earlier this week, there has been a reduction in the amount that the Group can draw down under its debt facility with Wells Fargo, the lender to the Group. The Company continues to review its working capital needs on an ongoing basis.

We have embarked on this transformational phase of our journey and we are confident we have the right leadership team and building blocks in place. We are excited about revitalising this distinctive and much-loved brand and to unlock its true potential. I remain extremely positive about the future of this great business and have unwavering confidence that we will be able to achieve our objectives of making Laura Ashley a brand that resonates with today's customer. 

CEO Appointment

Further to the announcement made on 31 January 2020, the Company announces that Katharine Poulter, current Chief Operating Officer of the Company, will be appointed as Executive Director and Chief Executive Officer with immediate effect.

Ms. Poulter has 25 years of retail experience with companies including Marks and Spencer plc, Home Retail Group plc, Kingfisher plc, Habitat Limited and Wilko Brands Ltd. Since joining as COO earlier this year, she has spearheaded a strategic review of the business.

Ms. Poulter succeeds Mr. Kwan Cheong Ng, who will retire as Chief Executive Officer of the Company. Mr. Ng will remain as Executive Director until 30 April 2020, after which time he will become a Non-Executive Director of the Board.

The Board would like to take this opportunity to thank Mr. Ng for his contribution as Executive Director and Chief Executive Officer during his tenure with the Company and to wish him the very best in his retirement.

Source : Laura Ashely Holdings

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