Laura Ashley rules two chiefs better than one

The chief executive of the crisis-hit retailer Laura Ashley has quit to return to his native Malaysia, the company said yesterday, as it reported a plunge into the red as a result of a disastrous performance in continental Europe.

The chief executive of the crisis-hit retailer Laura Ashley has quit to return to his native Malaysia, the company said yesterday, as it reported a plunge into the red as a result of a disastrous performance in continental Europe.

KC Ng is taking up a full time position in Malaysia but will remain on the Laura Ashley board as a non-executive director. He will not receive a pay-off.

He has been replaced by two joint chief executives, which will give the company a bizarre management structure as it also has two joint chief operating officers. David Walton Masters, the retailer's deputy chairman, admitted the structure was unusual but denied it was likely to cause confusion at the top. "We could not identify one person with all the attributes we were seeking," he said.

He admitted that neither of the two choices were "steeped in retail" but said their emphasis would be on providing leadership and on the execution of the group's strategy.

One of the joint chief executives is Ainum Mohd-Saaid, a former legal adviser to Laura Ashley as well as a former attorney general of Malaysia. The other is Rebecca Navarednam who worked in Malaysia before joining Corus and Regal Hotels as chief financial officer. The Malaysian group MUI is Laura Ashley's leading shareholder.

Dr Khoo, Laura Ashley's chairman, said: "We have chosen to split the CEO's role because of the unique skills that the new joint holders of this position bring to the company. They will have clear lines of reporting within the business."

The comments came as the fashion and home furnishings retailer reported another poor set of results caused largely by poor trading in its European division, which it is attempting to slim down.

Group losses totalled £14.1m in the year to 25 January, hit by £9m of charges to axe stores in Europe. Stripping out exceptional charges losses were £4.5m compared with a profit of £8.5m last year.

In current trading like-for-like sales are down by 27 per cent in Continental Europe and down 1 per cent in the UK.

Richard Ratner, retail analyst at Seymour Pierce, said: "These are awful, but not unexpected numbers, and the main problem is clearly Europe, where hopefully a franchising of the remaining operations will improve profitability."

Home furnishing margins fell due to a clearance of unsold furniture in the first halfand increased promotional activity. Fashion sales have held up in the UK.

The company is in talks with three potential franchise partners to take over its remaining 40 stores on the Continent. If those talks collapse Laura Ashley will close half of the remaining shops there. The group raised £8m through rescue rights issue last month in order to fund the closures. Laura Ashley has already stated that it will concentrate on the UK where it has 210 shops.

Though home furnishings now account for two-thirds of group sales the company insists its underperforming fashion division still has a future. The group said changes to its buying department were now showing through in improved sales of new ranges that would satisfy the demands of its middle aged, middle class customer base.

The shares closed 0.25p higher at 6.37p.