Laura Ashley has warned its full-year performance will fall short of expectations after it failed to make a profit in the first half.
The lifestyle retailer made no profit before tax and exceptional items in the 26 weeks to 31 December 2018, compared with a profit of £4.3m during the same period in 2017.
It made a loss before tax including exceptional items of £1.5m.
Group sales fell 8.8% year on year to £122.9m during the first half. Total like-for-like retail sales were down 4.2%
However, fashion like-for-like sales were up by 11.8%.
Laura Ashley said all of its group long-term debt had been cleared.
Chairman Andrew Khoo said: “Trading conditions have been difficult during the first six months of the year. Given the continued market turbulence and having reviewed the revised management forecast for the second half year, the board now holds the view that the performance for the entire year will fall short of market expectations.
”Despite these challenges, our fashion performance was strong, achieving like-for-like growth of 11.8%. We have recently launched a new digital platform which is expected to improve online sales in the years ahead. This improved platform incorporates enhanced functionality, superior customer interface and advanced technological capability.
“In line with our transformation towards a more lifestyle brand, the group remains committed to further develop the hospitality segment of its business. With four tea rooms and a licensed hotel already in operation, we have laid the foundation for the further expansion. A number of opportunities are being evaluated, and we expect to see further openings this year.
“The group is also exploring new partnership opportunities on the international front which will provide the thrust for our future growth. In the first half of this financial year, new stores were opened in India and Thailand by our franchise partners. In China, our online business continues to show growth. The Asian market will be a key focal point for the group’s international expansion, while we also explore opportunities in other regions.”