UK homewares retailer Laura Ashley has delivered an encouraging set of results as UK retail and online sales flourish.
Laura Ashley sales during the year were driven by its home accessories category, which grew 6.8 per cent on a 74-week like-for-like basis, largely as the result of product innovation and range additions (in under-potentialised categories such as cookware and kitchen products) and a higher participation in seasonal events throughout the year.
Laura Ashley is well positioned to tap into gifting demand during key occasions, such as Christmas and Mother’s Day, and in more recent years has made greater use of promotional tactics in order to drive spend.
Furniture was also a strong performer with like-for-like sales up 4.3 per cent, boosted by greater investment in developing existing ranges by introducing new fabrics, finishes and textures and supported by a greater availability of financing products. Fashion and decorating, however, were weaker performers, growing just 2.2 per cent and 1.6 per cent on a same-store basis.
Nevertheless, Laura Ashley has indicated potential new retailer partnerships in the UK for its clothing offer, a wise move given the more targeted and niche appeal of its clothing ranges.
Laura Ashley’s international franchise and licensing division – constituting 7.7 per cent of total group revenue – is struggling, largely due to a difficult trading environment in Japan, but the brand is pressing ahead with global expansion and has acquired a new licensing partner in Australia.
In the UK, it closed 18 stores over the 74 week period and opened five, ending the year with 192 stores. Store rationalisation must remain a core focus for Laura Ashley, and given its relatively stretched profit margin of 5.4 per cent, opportunities for expansion via concessions must be explored more in order to broaden its reach and protect its bottom line.
- Nivindya Sharma is an analyst with Verdict Retail.
