Laura Ashley will report below expectations profits of around £9 million for the year ended January 31 after the fashion to furnishings retailer was hit by plummeting consumer confidence and increased discounting.
Laura Ashley said that total UK stores sales rose 10.8% over the year, largely due to increased selling space but added that like-for-like sales had fallen back by 6.2% against the previous year. The period was for the 53 weeks ended January 31 versus a 52 week period.
Laura Ashley said in a statement: “The current volatile economic climate has led to challenging trading conditions in the UK. Since December, the continued deterioration of the UK economy, its impact on the retail sector and consumer confidence, the weakness of Sterling and increased promotional activity have resulted in additional pressure on gross margins.”
Laura Ashley said that internet sales had shown robust growth with an increase of 65.4%, which partially offset a fall in mail order sales.
Laura Ashley said in a statement that it expected the coming year to remain challenging and unpredictable with economic uncertainty impacting consumer confidence and spending patterns.
The retailer opened 29 stores over the 53 week period and closed nine shops.