Seán Anglim, CFO and joint chief operating officer at Laura Ashley, has said he is “optimistic” the retailer’s fashion margin will improve after “taking a hit” in its first financial half.
Pre-tax profit at Laura Ashley dropped 44% to £4.3m for the 26 weeks to 31 December 2017 as the weakness of sterling put pressure on margins.
The forecast for the business’s full-year pre-tax profit now stands at £5m, down from market expectations of £9m.
However, Anglim said the retailer should see improvement in the first half of the calendar year: “Fashion margin has taken a bit of a hit, but that’s predominantly because of the weakness of sterling during the reporting period.
“We’re encouraged by the fact the dollar has weakened over recent weeks. Also because we’re more confident in the product, we expect there to be less need for markdown. I think we’ll have a better performance on margin during the rest of this year.”
As like-for-like fashion sales rose by 1.2% in the period, Anglim said the retailer will look to drive this further by focusing on who its core customer is, ensuring that its product offering is more relevant and that sourcing “hits the spot” in terms of quality.
Total group sales fell by 7.7% year on year to £134.7m, with total like-for-like retail sales down 0.5%
The number of stores in the retailer’s UK portfolio - currently 151- will remain largely unchanged as any closures will be balanced by new openings.
Store openings are planned in Leicester and Leeds during 2018.
Outside of the UK, Anglim said the business has signed a Thai franchise partner SB furniture in the last four months and looks to open stores by the end of the year.
It is also looking at opportunities in South East Asia.