Laura Ashley lifted by advertising effort

Fashion and home furnishings firm Laura Ashley today posted a 62.3% leap in full-year profits despite falling sales amid tougher high street trading.

The group – famous for its floral prints – reported pre-tax profits of £19.8m (€25.2m) as the group’s advertising efforts and improved product sourcing lifted margins two percentage points to 47%.

Shares in Laura Ashley rose 11% on news of the profits hike, with speculation also mounting over Laura Ashley’s plans for Moss Bros after it upped its stake in the menswear group again this week to 5.96%.

Moss Bros is already in the sights of Icelandic investor and 29.75% shareholder Baugur, but Laura Ashley has been slowly increasing its holding and has not ruled out making a takeover bid.

The group remained tight-lipped on potential offer plans today, saying only that Moss Bros was a “portfolio investment”.

Laura Ashley’s profits hike appeared to buck the trend for retail gloom, but the group joined its rivals in sounding a cautionary note over trading prospects.

“In common with many retailers in the UK, we have experienced tough trading conditions that have adversely impacted sales performance in all product areas,” said the firm.

It added: “While we are confident that our strong brand and product offering are compelling, we remain cautious about general trading conditions in the retail market for the year ahead.”

It said annual like-for-like UK retail sales dropped by 8.7%, or 5.9% on an adjusted basis, with like-for-like sales falling further since the year end, down 8.8% from January 26 to March 15.

Sales were also hit by the group’s store expansion and “realignment” programme, with 33 stores opened and 14 smaller stores closed.