SLUGGISH sales by its European outlets pulled down the overall performance of Laura Ashley, the Malayan United Industries Bhd-owned high street fashion company, which has joined the ranks of disappointed Christmas retailers.
Its 67 outlets in continental Europe registered a 7% drop in like-for-like sales during the 23 weeks to Jan 4, with the 12 stores earmarked for closure performing poorly at a time of tough trading conditions in Germany and France.
Underlying sales in Britain, where the company runs 203 stores, rose 7%, but the trading results would be “substantially lower than current market forecast,” indicating that it would at best break even.
Iain Nairn, its executive director of operations, told the Financial Times that the company was still in talks to franchise all eight continental markets where Laura Ashley operates.
“We think it will be pretty difficult over the next few months, depending on the economic conditions,” Nairn said, alluding to fears about recession and a possible war with Iraq.
Laura Ashley was not the only company putting out a profits warning as Dixons, Britain’s largest electrical chain, reported gloomy news, followed by Next, the fashion retailer.
However, companies such as department store John Lewis reported a good Christmas; while Signet, the jewellery retailer, was satisfied with its “respectable sales”, bucking the otherwise gloomy outlook.
On the continent, the market is braced for more bad corporate news, which has been blamed on falling corporate confidence across Europe where the forecast for eurozone growth in the fourth quarter of 2002 has been cut to 0.1%-0.4%.