Sales and profits at Laura Ashley have taken a battering in the first half of its financial year, prompting the retailer to warn on profits.
Pre-tax profits at the fashion and lifestyle retailer plummeted by 29 per cent plunge from £11 million to £7.8 million for the six months to December 31, hit by falling sales and surging costs.
Retail sales over its first half – which includes the crucial Christmas trading period – fell 3.5 per cent on a like-for-like basis, making it buck the trend of what was a robust festive season on the high street overall.
Meanwhile, total group sales stood at £146 million compared to the £149.8 million recorded in the same first-half period the year prior.
Laura Ashley’s like-for-like sales are also still in the red since the start of its second half – down 0.6 per cent in the six weeks to February 11.
However, a silver linings in its half-year report was its expansion to China and healthy online revenue, which grew from £25 million to to £25.6 million year-on-year.
“Trading conditions have been demanding during the first six months of the year,” chairman Tan Sri Dr Khoo Kay Peng said.
“The board have reviewed the first half results and forecasts for the remainder of the year to 30 June 2017 and, given the continued market challenges, feels that net pre-tax profit for the year will fall below market expectations.
Despite the well-documented pressures in the broader commercial environment, there have been a number of positives in the first half and the business is well placed to respond to the challenges ahead.”
The retailer added that profits were affected by rising costs after the sterling’s drop in value since the Brexit vote, plus the new national living wage, which together cost it £52.3 million.