THE BLUFFERS GUIDE
Your essential companion to the history, histrionics, hubris and hurrahs of a company, personality or topic that will be big in the business news this week
Sunday 14 April 1996
Status: Retail chain with 539 shops worldwide. Not small but not perfectly formed either.
Beginnings: Founded by the eponymous Laura Ashley on her kitchen table in London in 1953.
Product: The reputation is for floral prints and frilly bits - a kind of "Edwardian milkmaid" look. New management is trying to broaden the appeal with Laura Ashley as a brand, not just a look.
High point: Flotation in November 1985 when the overhyped share issue was oversubscribed 32 times.
Low point (1): September 1985, just two months before the company's flotation, when Ms Ashley died, aged 60, after falling down the stairs of her daughter's Cotswold cottage.
Low point (2): Pretty much the entire last six years, when the company has struggled to cope with a string of financial disasters. Clothing cliches have run amok: "Laura frayed at edges", "Figures unravel like cheap cardigan".
Owners: Mainly pension funds and insurance companies. But Laura's widower Sir Bernard, who divides his time between his yacht in the Caribbean and a home in the US, holds a 34 per cent stake worth around pounds 140m.
Managers: Sensitive point. The company has gone through numerous bosses. The latest is Ann Iverson, the flame-haired American credited with turning round Mothercare. The shares leapt on news of her appointment. She has cleared out the board, appointing several women to senior positions. The top three posts are now held by Americans.
Any other help? John Thornton, one of Goldman Sachs's most senior men in Europe. Appointed chairman last month, demonstrating Iverson's pulling power.
Financial performance: Diabolical. The shares have underperformed by a dismal 58 per cent since the flotation. Would-be shareholders can only be grateful their applications were drastically cut.
What went wrong? Just about everything. Laura Ashley fell into every trap, from over-optimistic expansion to under-investment.
Who was to blame? Good question. Although short-lived bosses Hugh Blakeway- Webb and Jim Maxmin were not impressive, they inherited a fraying fabric, or indeed, an unravelling cardigan. The problems date back to 1989-90 when the company expanded too quickly. As chairman, Sir Bernard was hardly blameless.
Strategy: To build on the value of the brand and sort out the problems in America.
Prospects: Fair to middling with Iverson at the helm, but it will take time. Analysts are expecting doubled profits of pounds 7m this week. There should also be news about further restructuring of the store portfolio. Improvements in the perennial stock problems would be nice.
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