Mrs Iverson, 51, who joined the Laura Ashley board as a non-executive director last July, will take up the chief executive position next month. She is currently chief executive of Kay-Bee Toys, a division of the US group Melville.
Mrs Iverson's pay package has not been disclosed but is heavily geared towards performance, notably profits. She will be on a two-year fixed contract followed by a one-year rolling period.
Commenting on her appointment, Mrs Iverson said: "The brand is absolutely brilliant and I'm thrilled to be associated with it. I look forward to leading it to profitabilty in the 1990s and to the year 2000."
Mrs Iverson said she would add retail experience to the group and broaden the recent restructuring. This will include an examination of the supply chain.
"It's been a while since a retailer led Laura Ashley," she said. She added that she was confident that the company could be turned around.
Sir Bernard Ashley, whose family speaks for 34 per cent of the shares, dismissed speculation that he was considering selling his stake - "particularly with Ann at the helm my belief about the long-term potential of this group remains undiminished".
Following Mrs Iverson's appointment, Hugh Blakeway Webb will step down as chairman, to be replaced by Lord Hooson.
The shares rose 3p to 83p.