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Laura Ashley negotiates price cuts with suppliers

Fashion-to-furnishings business Laura Ashley is asking suppliers to lower their prices to help mitigate the impact of the weak sterling

Fashion-to-furnishings business Laura Ashley is asking suppliers to lower their prices to help mitigate the impact of the weak sterling.

Chief executive Lillian Tan said the weak sterling was heaping pressure on the chain to increase prices to the consumer, which she wanted to avoid in the current climate. Laura Ashley said its selling prices were under review for autumn 09.

“We are reviewing our supplier contracts,” Tan said. “In light of the weakening sterling there’s been some pressure for prices to go up. It’s been difficult to agree with suppliers. But we’ve got to manage costs and bring prices [from suppliers] down. We’re looking for suppliers to co-operate with us.”

Laura Ashley said like-for-like sales rose 3.6% for the 53 weeks to January 31, with total fashion sales up 24%. However, this was driven partly by extra promotional activity as well as increased selling space for fashion.

Tan said the consumer downturn had necessitated additional markdowns, but said discounting had been restricted to targeted promotions rather than overall Sales. Gross margin fell 2%.
She said: “I’m doing more reactive marketing, such as Mother’s Day specials.”

Total sales at the group rose 9.6% to £260.5 million for the year but pre-tax profits for the period almost halved to £9.6m, from £15.8m the previous year.

Laura Ashley’s UK trading has deteriorated since the year end. Retail sales rose 10.6% to £20m but like-for-likes fell 6.2% for the seven weeks to March 21.

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