Full-year profitability at fashion & furniture retailer Laura Ashley was dented by significant investments, but the group did manage to improved its sales volumes and margins during the period.
The acquisition of a hotel in Hertfordshire, which will be used for displaying product ranges, in November 2011 has left a £5.8 million hole in the retailers accounts, and with operating expenses rising by over £2 million during the 12 months ending January 28th 2012, full-year profit fell annually from £19.3 million to £13 million.
Once exceptional items are extracted, including the sale of the Bardon warehouse, however profit before tax reached £18.8 million.
Like-for-like (LFL) sales during the year showed strength, rising 3.3 per cent year-on-year across all operations, however UK retail sales were dampened by weak consumer spending and dropped 0.6 per cent in total to £255 million.
Tan Sri Dr. K P Khoo, Chairman of Laura Ashley, commented: “In what continues to be a very competitive consumer environment, I am pleased that we have maintained the progress of recent years and delivered a resilient set of results, maintaining gross margin and seeing continued like-for-like sales growth across the retail business.
“A strong performance in the first half of the year was followed by a more challenging Autumn; we did however see a return to stronger trading towards the end of 2011 with a positive trend in like-for-like sales growth.”
Trading has continued to improve for the business into the new financial year with sales during the first eight weeks of the period up 10.9 per cent LFL, and the retailer’s online division continues to grow in strength.
E-commerce sales were up 10.4 per cent during the year and now represent 13.8 per cent of total UK retail sales & 12.3 per cent of overall group sales, with the company now delivering its full product range to Germany, Austria, Italy and Switzerland as well as domestically.
Laura Ashley has reduced its total selling space by 3.2 per cent over the period with seven UK stores closing and one new one opening, as the business looks to realign its store portfolio towards smaller concept stores.
Khoo added: “Laura Ashley’s success stems from its high-quality product offering and distinctive style which is based on the brand’s rich design heritage and contemporary interpretations.
“As we expand internationally, we are proud that over 40% of our sales is derived from products manufactured in the UK.”