Laura Ashley sees profits plunge on falling sales and surging costs

Fashion and homewares retailer Laura Ashley has warned over full-year profits after being hit by falling sales and surging costs.

The group revealed a 29 per cent plunge in pre-tax profits to £7.8 million (€9.2 million) for the six months to December 31st.

Retail sales over its first half, which includes key Christmas trading, fell 3.5 per cent on a like-for-like basis, putting it on a shortened list of losers over what proved to be a robust festive season elsewhere on the high street. Shares in the group tumbled 11 per cent as Laura Ashley alerted over profits amid tough trading, with like-for-like sales still in the red since the start of 2017 – down 0.6 per cent in the six weeks to February 11th.

Chairman Tan Sri Dr Khoo Kay Peng said: “Trading conditions have been demanding during the first six months of the year. The board has reviewed the first-half results and forecasts for the remainder of the year to June 30th, 2017 and, given the continued market challenges, feels that net pre-tax profit for the year will fall below market expectations.”

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The group said profits were also knocked by rising costs after sterling’s plunge in value since the EU referendum, as well as the new UK national living wage, which together cost it £52.3 million.

-PA