New chairman to close 40 Laura Ashley stores

Laura Ashley is to close around 40 stores as the company's new chairman pushes ahead with a fresh vision for the brand which includes expansion in China.

AW18 leisure by Laura Ashley

Andrew Khoo said he expects to reduce the number of UK stores from 160 to 120, continuing a strategy that has seen 40 retail units close since the beginning of 2015, including in York city centre.

There are currently 13 stores in Yorkshire and there is no confirmation on which UK stores will be affected by the next wave of closures.

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Mr Khoo, who took over as chairman of Laura Ashley’s owner from his father Khoo Kay Peng last week, said: “The direction I want to go is to have not so many stores, but maybe the ones we have could be larger.

“It’s more about showcasing the brand. It doesn’t really matter if they buy online or offline, we just want them to get inspired.”

He added that the group would look at moving staff from any stores which close to the enlarged shops.

Meanwhile Laura Ashley will roll out bricks and mortar stores in China once it has built a significant online customer base.

“We’re moving to Asia in a much bigger way,” said Mr Khoo.

“We have a regional office in Singapore, it’s a dedicated office of about 10 people and it’s focused purely on ecommerce into China.

“Once we get a significant foothold in digital retail in China we can look at the physical stores rollout.”

British retailers have had a difficult year as high street footfall declines and consumer confidence wanes.

Last week Sports Direct boss Mike Ashley said November was “unbelievably bad” and warned that many retailers will be unable to take the strain.

In August, Laura Ashley revealed it barely broke even after hefty writedowns on a property sold in Singapore saw profits crash to just £100,000.

Its pre-tax profits fell from £6.3m the previous year as retail like-for-like sales slid 0.4 per cent.

The fashion and homewares retailer said furniture sales were knocked in particular by weak consumer confidence, falling 4.1 per cent on a like-for-like basis as shoppers put off buying expensive items, such as sofas and beds.

The group’s home accessories category, its largest division, saw like-for-like sales rise 2.9 per cent.

The group said it was “encouraged” by its performance online, with like-for-like internet sales up 4.1 per cent and now accounting for 25 per cent of retail revenues.

Its fashion division was also a bright spot, with comparable sales lifting 9.7 per cent in an “extremely competitive sector” thanks to a refreshed range after new leadership was hired for the division a year ago.

Last week, Mr Khoo said that Laura Ashley in the UK had seen some promising signs in the run-up to Christmas including an uptick in clothing sales, but it has been slow to shift big-ticket items like furniture.

“It’s a challenging environment and it could become more challenging,” he said.

But he remained positive on Laura Ashley’s home market despite the threat of Brexit uncertainty.

“My long-term view of the UK is I have confidence in the UK and we will continue to invest in the UK. As long as Laura Ashley stays relevant there’s no reason we can’t get over this little speed bump.”

Khoo Kay Peng was succeeded by his 46-year-old son after 19 years at the helm.

The Malaysian businessman, 79, stepped down as chairman and director with immediate effect last week.

The family owns 35.2 per cent of the retailer through MUI Asia.

Khoo senior also owns 25.8 per cent of Laura Ashley through a personal shareholding.