Laura Ashley (LON:ALY) have seen their shares crash on Monday morning as the British high street firm has answered its critics in the media.
Shares in Laura Ashely dived 43.42% and trade at 1p. 17/2/20 10:39BST.
There is no doubt that Laura Ashley have seen a tough time of trading over the last few months.
Since their financial year ended in June, trading has been challenging and there has been speculation as to whether the firm would be needing help to survive in a tough British retail industry.
An update was not expected from Laura Ashley today, however it seems that the firm has seen the need to answer its critics in the media.
The announcement was in response to “speculation regarding its financial position.”
Laura Ashley said that in the 26 weeks up to 31st December 2018, total group sales were £109.6 million, which saw a 10.8% drop from £122.9 million in 2018.
Notably, the firm said that the decline in total revenue was due to market headwinds and decreased consumer spending.
Looking forward, Laura Ashley said that Wells Fargo and the Company’s majority shareholder MUI Asia Limited, are ‘discussing arrangements that will allow the Group to utilize sufficient funds from the Wells Fargo facility to meet the Group’s immediate funding requirements and to draw down additional amounts to meet ongoing working capital needs for the Group in the short to medium term.’
Andrew Khoo, Chairman, commented:
“We acknowledge that recent trading conditions, in line with the overall UK retail market, have indeed been challenging. There is however a robust plan in place to turn the business around and the Board of Directors is confident and optimistic that the recent appointment of Katharine Poulter will enable the business to execute this broad based strategy. The major shareholders have indicated their continued confidence in the business and are fully supportive of the management team and execution of the transformation plan.”
Finance Chief Departs Laura Ashley
In October, the firm announced that its Finance Chief had left the company.
This resulted in shares plunging over 26%, however from today’s update the run has only got tougher for Laura Ashley.
Sean Anglim stepped down after 20 years at the British Textile firm, and was replaced by Sagar Mavani.
“The board would like to take this opportunity to thank Mr Anglim for his contribution during his tenure with the company and to wish him the very best for the future”.
August loss reports
In August, a few months into its new financial year things got tricky for Laura Ashley as the firm reported a statuary loss before tax.
The homeware and clothing retailer said that, for the 52 weeks to 30 June, statutory loss before tax amounted to £14.3 million.
The primary causes for the year-on-year drop in profit are the underperformance of Home Furnishing and its website after a re-platforming exercise last November.
Total like-for-like retail sales were down 3.5%, whilst total group sales reached £232.5 million, down from the £257.2 million figure recorded for 2018.
These are testing waters for Laura Ashley. Following such heavy media speculation, there was a need to address these issues however it seems that shareholders are not as confident in the firm as reflected with the 43% crash in share price today.