Laura Ashley shares rise on takeover talk

Shares in Laura Ashley hit their highest level in nearly a year today amid speculation that the home furnishings retailer could be taken private.

Whispers in the London market suggest that one of the company’s biggest shareholders had approached other major investors with a view to taking full control.

But analysts played down the likelihood of such a move even though Laura Ashley has seen its stock shrink since its heyday in the 1980s and is worth less than £100m (€144m) now. A spokeswoman for the company declined to comment on the speculation that saw its shares climb by as much as 16% today.

Best known for its floral fabrics, Laura Ashley has suffered a turbulent few years and only returned to the black in 2004 when it posted profits of £3.1m (€4.5m).

The company, which has more than 180 stores in the UK, is majority owned by Malaysian United Industries which is headed by entrepreneur Dr Khoo Kay Peng.

It is currently led by Lillian Tan who took over earlier this year from Ainum Mohd-Saaid and Rebecca Navarednam.

Earlier this year, Ms Tan vowed to cut further its dependency on fashion sales and focus more on home furnishings as she faced up to the challenge of reversing an 13.9% fall in like-for-like sales in the first 10 weeks of its financial year.

Efforts to turn around the business have also led to around 450 staff losing their jobs over the past 18 months, including redundancies at factories in Newtown and Carno in mid-Wales and its London head office.

In June, Laura Ashley announced the closure of its flagship store on London’s prestigious Regent Street, blaming a rise in rents to unprofitable levels.

Evolution Securities analyst Nick Bubb said Laura Ashley would “undoubtedly” benefit from being taken private, but noted that its Malaysian owners had shown no willingness in the past to remove it from the stock market.

Speculation may have followed the recent approach by Peter Simon, the founder of Monsoon, to buy up the remaining shares in the clothing chain that he does not already own, he believed.