 has issued its third profit warning in 12 months following disappointing Christmas trading results. ){kind=link}
Retailer Laura Ashley (LON: ALY) has issued its third profit warning in 12 months following disappointing Christmas trading results.
The group reported a drop in pre-tax profits. In the second half of 2017, profits dived fell from £7.8 million a year earlier to £4.3 million.
“UK retail is evolving with new players coming in,” saidSeán Anglim, Laura Ashley’s finance director. “The market is getting more and more competitive.”
News of the profit warning sent shares plunging. At their worst, shares fell 26 percent but closed down eight percent at 5.6p.
The store saw a drop in furniture sales by 4.4 percent while decorating products such as fabrics and wallpaper declined by 3.9 percent.
According to Laura Ashley, the most significant factor was the fall in the pound compared to the dollar.
The group has 161 UK stores and is moving its business into hotels and tearooms.
Laura Ashley has two boutique hotels in the UK, which have reported steady growth of £1.2 million for the period.
“The Laura Ashley brand has been much-loved in these territories for over 30 years, and we see an exciting opportunity to build on this with the master licensing rights back under our management,” said chairman Khoo Kay Peng.
Laura Ashley is not the only furniture retailer to be struggling in this economy.
The bedmaker Warren Evans went into administration earlier this year and risks closure unless a buyer is found. In November, furniture makers Multiyork and Feather & Black have both filed for administration.
“We have yet another UK retailer under the cosh because it has not really kept pace with changing consumer trends or managed to stay terribly relevant,” said Neil Wilson, an analyst at ETX Capital.
“How can management get away with blaming the weak pound last year?” he said. “We are no doubt not alone in pointing out that sterling was broadly higher in 2017 and enjoyed a 10 percent gain versus the US dollar,” he added.