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Online fashion sales help lift Laura Ashley profits

Womenswear and furniture retailer Laura Ashley saw pretax profits surge in in the 26 weeks to July 31, partly driven by its new Laura Ashley Weekend casualwear range and online fashion sales.

Pretax profits excluding exceptionals grew from £100,000 to £5.7m during the period, and group turnover increased 5.7% to £135m. The UK arm notched up a 5.5% increase in revenue to £121.6m and its like-for-likes were up 6.2%.

Fashion rose by 4.3% on like-for-like growth of 1.6% at the 225-store retailer, “despite facing tough comparatives”, while e-commerce sales, across its ranges, rocketed 63% to £15.4m.

The retailer said fashion sales had benefited from online, which is helping to attract new customers. It sais its range of up-dated classics and new items, including tunic dresses and blouses, had sold well, and it has received a positive reaction to the new Laura Ashley Weekend range, which will remain a small collection but will be rolled-out further over the autumn season

UK sales growth has slowed in recent weeks, with like-for-likes increasing 4.9% in the 31 weeks September 4.

Including an exceptional gain due to the sale and leaseback of a freehold property, the retailer notched up £10.5m in pre tax profits in the six month period, compared with £1.1m in the corresponding period last year.

Gross margin improved 1.4 percentage points as the retailer benefited from stronger Sterling and lower promotional activity.

Laura Ashley operates 233 franchised stores across 26 countries, where revenues grew 3% to £10.4m in the period.

The retailer closed six UK stores in the period, and will continue to realign its portfolio in 2010, focusing on the acquisition of “smaller, new concept stores” while “optimising space” in its existing portfolio.

Laura Ashley chairman Tan Sri Dr K P Khoo said:  “In a difficult economic climate, Laura Ashley has continued to demonstrate the strength of its brand and has recorded positive like-for-like sales growth across all product categories.

“Our e-commerce and international channels have continued to grow and become increasingly important to our multi channel strategy.”

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