August 22, 2019 @ 11:47 by Steven Hugill
A fashion and homewares retailer operating shops across the North East has warned it plans to close stores as it battles a £14.3 million loss.
Laura Ashley says “five to seven stores” will shut as it works to reverse a disappointing full-year performance.
The company says the move will be partially offset by the opening of two new shops.
The firm, which has outlets in the Metrocentre and Mercia Retail Park, on the outskirts of Durham City, swung to a statutory pre-tax loss of £14.3 million in the year to June 30 as weak demand across its decorating and furniture divisions outweighed a rise in demand for its fashion lines.
Total group sales stood at £232.5 million, compared to £257.2 million in 2018, with like-for-like sales falling by 3.5 per cent over the same period.
Internet sales were £51.2 million, compared to £59.7 million in 2018.
Sales in decorating, which includes fabric, curtains, wallpapers and paints, fell by 15 per cent, with like-for-like sales down 13.7 per cent.
Bosses said they have carried out a thorough review of its entire range and will introduce new designs to revive its fortunes.
The business’ furniture arm, which sells items such as upholstered and cabinet furniture, beds and mirrors, saw annual sales fall 10.1 per cent, with like-for-like sales down nine per cent.
Officials said the division was hit by weak shopper confidence, particularly at higher price points, and revealed they plan to add new styles in the coming months to provide fresh impetus.
Fashion sales increased by 4.2 per cent, with like-for-like sales up 9.2 per cent.
Chairman Andrew Khoo acknowledged the business, which has further North East outlets at Stockton’s Teesside Retail Park and Darlington, has endured a tough time.
However, he said the company is optimistic for the future, saying he expects changes to its furnishing division to make a difference.
He said: “The last 12 months have proved to be a difficult trading period for the group and indeed for the retail sector as a whole.
“The primary causes for the year-on-year drop in profit have been the performance of home furnishing and that of our website following a re-platforming exercise.
“We have focused on the reasons why home furnishings have underperformed and have taken necessary steps to mitigate this, including adding new contemporary product to our ranges.
“We have taken active steps to listen to our customers and now believe that we are on an appropriate recovery path. We continue to invest in our website…to deliver an enhanced customer experience.
“We are (also) pleased with the continued resurgence of our fashion business.”