Sales revival at Laura Ashley

Laura Ashley, the clothing and home furnishings retailer, posted its first full-year profit since 1997 yesterday and said it hoped to resume dividend payments next year.

Laura Ashley, the clothing and home furnishings retailer, posted its first full-year profit since 1997 yesterday and said it hoped to resume dividend payments next year.

The company, best known for its floral fashions, reported pre-tax profits of £10.2m for the year to 27 January, from the previous year's £4.1m loss.

The home furnishings division was the best performer, with underlying sales up 20 per cent on the previous year. Jim Bellingham, its finance director, said sales had been boosted by an increase in the product range to include leather sofas, cabinet furniture, rugs and mirrors. The business has also increased the emphasis on its design services, in which Laura Ashley representatives visit business and domestic customers to help design and decorate their offices or homes.

Clothing sales grew by 4 per cent on an underlying basis helped by design improvements. The company says it now concentrates on core customers: professional women aged 30 and older.

Mr Bellingham said a new store design, replacing the old green fascia with a bright cream look, has been applied to more than 60 per cent of the shops, with the rest due for completion by the end of next year.

The group has closed 31 underperforming stores in Homebase branches. Laura Ashley group now has 191 UK outlets, including 75 in Homebase stores. It also has 64 outlets in continental Europe and 200 franchise outlets, mostly in the US and Japan.

More stores are planned for Germany, but the UK focus has turned to expanding the mail-order business. It launched a new bedroom catalogue last spring and will relaunch a clothing catalogue this summer ­ four years after Ann Iverson, a former chief executive, axed it.

Current trading is strong, with underlying sales in the first nine weeks of the current year up 8 per cent on last year. Laura Ashley is 40 per cent owned by Malaysian group MUI. The group has net cash of £14.5m but negative reserves. Its shares rose from 22.25 to 23p. They stood at 208p in 1997.