Brexit drives profits down 72% at Laura Ashley

Profits at Laura Ashley plummeted 72 per cent last year as the struggling fashion and homeware retailer pointed to challenging trading conditions and the weaker pound following the Brexit vote.

The company said pre-tax profit tumbled from £22.8 million to £6.3 million in the year to June 30th, although its comparable 2016 numbers ran over 74 weeks. Like-for-like sales fell 3.1 per cent, while total group sales dropped 30 per cent to £277 million (£300m).

Chairman Khoo Kay Peng said: “Trading conditions have been challenging for the year ended June 30th, 2017. The impact of weak sterling has also contributed to the overall fall in profit which the group has experienced.”

Weaker sterling following the UK’s decision to quit the EU last year has ramped up import costs for retailers, which have then passed the pain on to consumers. The net result has been falling retail sales as squeezed shoppers cut back on spending.

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As well as challenging trading, the firm said sales were hit by the closure of 22 concessions in Homebase during the period.

However, Laura Ashley said online sales were heading in the right direction and its international expansion into India and China was making good progress.