Laura Ashley profits climb 9.2%
Fashion and homewares retailer Laura Ashley has reported a 9.2% increase in its full year pre-tax profit as it continues its international and online expansion.
In the 52 weeks to 26 January 2013, pre-tax profit rose to £20.1 million from £18.4 million in the previous year. While total sales saw an uplift of 4.5% to £298.8 million, UK retail sales climbed 3.1% to £263 million. Like-for-like sales were up 2% with positive like-for-like growth across most categories.
During the year, the retailer opened six new stores in the UK and closed five as part of an ongoing store portfolio realignment programme which focused on optimising profitability. As a result, total selling space fell by 0.5% to 802,000 square feet.
Laura Ashley said its online sales contributed 16% of total UK retail sales and 14.1% of total group sales, increasing from last year's 13.8% of total UK retail sales and 12.3% of total group sales.
Total online and mail order sales were up 16.4% on the previous year with the online sales rising by 19.6% which the retailer said more than compensated for an ongoing market decline in mail order sales. During the year, a mobile site offering the complete range of products was added to the digital platform.
With the retailer’s UK business split into four main categories, furniture accounted for 30% of sales, home accessories for 28%, decorating for 23% and fashion for 19%.
Total furniture sales increased by 0.5% in the year and by 1.4% on a like-for-like basis. Home accessories achieved a 7.6% increase in total sales and 8.5% rise in like-for-like sales.
The decorating category, which includes curtains, blinds, fabric, paint and wall coverings, saw total sales increase by 0.7% while like-for-like sales rose 1.6%.
However, UK retail fashion sales dropped by 5.6% and by 4.8% on a like-for-like basis. The retailer said it was now taking measures to enhance and improve the offering.
Laura Ashley ended the financial year with 266 franchised stores, up from 245 in 2012, in 28 countries worldwide. These included four new stores in Russia. Since the year closed, the retailer has signed agreements with franchise partners in Poland, Armenia and The Baltic states. Franchise revenues grew by 13.3% in the year to £27.1 million while licensing income increased by 17.2% to £4.2 million.
Looking ahead, the retailer said it had achieved like-for-like sales growth of 2.7% in the first two months of the current financial year, adding that it was confident that the level of progress could be maintained.
Chairman Tan Sri Dr. K P Khoo, said: "I am pleased that we have maintained the progress of recent years and delivered another strong set of results. Continued like-for-like growth across retail, bolstered by strong performances from both our online and international businesses, have helped to deliver 9.2% growth in profit before tax.
"We are confident that, despite an extremely competitive retail sector and a challenging consumer environment, both our business and brand are able to continue the steady and robust progress of recent years. As we continue to expand both globally and online, we believe that our quality product ranges, based on sixty years of innovative design and a rich brand heritage, underpin the foundations of our future growth."
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