Laura Ashley has swung to a loss as a continued decline in its home furnishings business and changes to its website weighed on sales.
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The high street stalwart revealed it made a pre-tax loss of £14.3m in the year to June 30, compared to a profit of £100,000 this time last year.
Excluding exceptional items, the loss before tax came in at £9.8m versus last year’s £5.6m profit.
Total group sales were down 9.6 per cent to £232.5m, with like-for-like retail sales falling 3.5 per cent.
Andrew Khoo, the brand’s chairman, said: “The last 12 months have proved to be a difficult trading period for the group and indeed for the retail sector as a whole.
“The primary causes for the year-on-year drop in profit have been the performance of Home Furnishing and that of our website following a re-platforming exercise which took place in November 2018.”
Within the home category, furniture and decorating were hit especially hard with like-for-like sales down by 9 per cent and 13.7 per cent respectively.
Home accessories, which accounts for the biggest slice of UK sales, rose by 1.1 per cent on a comparable basis. but comparable fashion sales were up 9.2 per cent.
Meanwhile, the relaunch of the website led to online sales falling 14.2 per cent.
Elsewhere, the group is growing its hospitality business, with nine licensed Laura Ashley tea rooms and two hotels now in operation.
The company said it had made “good progress” on expanding the project internationally.
Outside of the UK, franchise and licensing revenue was down due to the loss of business in Japan after ending its relationship with retail partner Aeon in September.
A new partner has since been appointed for Japan, while another will develop the brand in China, where Mr Khoo has previously said he would like to roll out stores.
Shares in the company were down 5 per cent in early trading on Thursday.
Julie Palmer, partner at Begbies Traynor, said: “Until consumers are given the confidence to start parting with their cash or it sees some hope from overseas markets, the business will continue to struggle.
“But it cannot rely on outside factors, it needs to find its own solutions across design and infrastructure if it is to appeal to a new consumer market.” Amy Higginbotham, retail analyst at GlobalData, the data and analytics company, said: “Laura Ashley’s appeal continues to wilt amid increasing competition from design-led home specialists such as West Elm and Made.com, which offer a more contemporary product range. Laura Ashley’s brand has long been tired and is in need of major rejuvenation if it is to regain relevance among homewares and furniture shoppers.”
She added: “A stronger performance in its fashion division... will provide some comfort for Laura Ashley, and the retailer should consider rebalancing its product mix in favour of its stronger fashion business, which currently only accounts for 19 per cent of retail sales.
“Laura Ashley’s recent collaboration with Urban Outfitters has allowed it to capitalise on demand for floral trends, leveraging its position as a nostalgic nineties brand.”