Laura Ashley profit rise driven by strong UK performance

Group revenue increased 3% to £268.4m, aided by a strong performance in the UK, where sales rose 3.6% to £243.6m. UK like-for-likes increased 3.5%.

Current trading has continued to show growth, with UK like-for-likes rising 4.6% in the 8 weeks to March 27, due to targeted promotional activity. Revenue in the UK increased 5.6%.

Gross margin declined by 1.8% as a result of the weakness of the sterling, as well as planned promotional activity.

Furniture like-for-likes soared 13.8% while total sales grew 18.2%, as the retailer benefited from range expansions, updates of best-sellers and planned promotions.

Home accessories like-for-likes increased 1.6%, driven by children’s ranges and fragrances.

Fashion like-for-likes increased 9.8%, with total sales up 12.9%, boosted by accessories and new ranges in apparel.

Internet sales increased 30% to £22.1m, and now represent 12% of UK sales.

Laura Ashley trades from 231 stores in the UK, including 137 mixed products stores, which sell both fashion and home.

The retailer opened its first Laura Ashley Gift & Accessory store at Liverpool Street Station, London, in the period. The format will be rolled out, depending on the availability of  suitable locations. It added it will “aim to try new concept stores in strategic locations” in the future.

The retailer operates 230 franchised stores internationally, across 26 countries. Franchise revenues fell 5.6% to £19.4m as the territories continue to be affected by the global economic downturn.

The retailer plans to open in more countries in the Gulf states.

Laura Ashley chairman Tan Sri Dr. K P Khoo said: “This has been another year of continued revenue growth for Laura Ashley despite a difficult market.

“I am encouraged to see the strong like-for-like growth across all categories, particularly Furniture, and to see the important role that E-commerce continues to play in driving growth. 2009 witnessed a period of consolidation in the marketplace following the uncertainties of 2008.

“Customer confidence is returning but is tempered with a degree of caution. Laura Ashley is confident that its strong balance sheet, strong brand and distinctive product offering will provide a platform for continued growth in 2010.”