Laura Ashley (LON: ALY) has reported a 98 percent slump in profits following “difficult trading conditions”.
The fashion and homeware retailer’s profits fell from £6.3 million the previous year to £100,000, forcing the group to write down the value of a property it sold in Singapore.
Khoo Kay Peng, the group’s chairman, said he was “disappointed” by the fall in profit which he blamed on a “changing retail landscape”.
He also said he was “encouraged” by online sales and reported plans to launch a new digital platform in the weeks to come.
“Laura Ashley’s brand is built on beautifully designed, high quality products. Whilst the trading environment will continue to be challenging, we remain resolutely confident in the underlying strength of this much-loved brand, in its relevance for today’s consumer and in our strategies to both maintain and develop the brand and the company,” he added.
The company has sold the Singapore property to SB Investment for SGD$54.5 million in cash and plans to focus on its core UK retail business.
“Whereas international business continues to be important for the group, and now accounts for approximately 7 percent of total group revenue, the group’s primary market continues to be the UK,” said Laura Ashley.
Laura Ashely said its expansion in Asia is still part of the group’s strategy but due to the changing retail environment it is the “appropriate time” to sell the Singapore property.
Investors welcomed the move, and Laura Ashley’s shares were up 15.7 percent to 5p in early trade.
UK retail sales fell to £236 million from £252 million. Online revenue increased to £59.7 million from £57.3 million. Sales in the home accessories, furniture and decorating divisions fell 3.6 percent, 8.2 percent and 13.9 percent respectively.