FTSE All-share retailers indexLaura Ashley sharesSOURCE: BLOOMBERGChart rebased to 100Laura Ashley has underperformed rivals2015 2016 2017 2018 2019150100500Laura Ashley is off
the pace – could it
soon be off the
stock market too?
W
hy Laura Ashley
remains a listed
company is the
question that
puzzles many retail
analysts and
observers. Its shares plunged as much
as 17pc yesterday and despite turning
positive before the end of the day the
retailer is still valued at less than
£14m. It went from breaking even last
year, offering a glimmer of optimism
that a revival was not out of the
question, to pre-tax losses of £14.3m in
2019.
“There are no plans to take it
private,” retorted Sean Anglim, Laura
Ashley finance boss. “We’ve had the
same shareholders [for a long time]- it’s given us stability.”
The retailer’s flowery wallpapers
and made-to-measure curtains, once
the height of good taste, are no longer
in vogue. It has struggled to see off
competition from the likes of West
Elm and Made.com, which have been
luring shoppers with their modern
designs.
As a result, Laura Ashley’s like-for-
like furniture sales were down 9pc and
decorating products sank nearly 14pc.
Andrew Khoo, who succeeded his
father Khoo Kay Peng as chairman last
year, says Laura Ashley is on track to
address the decline by offering more
products at lower prices. “We are
using this opportunity to look at the
fundamentals of the business. We
need to simplify our business and
focus on our key strengths,” he said.
The chain, owned by the Malaysian
group MUI, has some scope for
investment after shedding all its debt
over the past year by selling some
property in Singapore and in Elstree,
Hertfordshire.
It also secured a new pot of
emergency cash from US bank Wells
Fargo. Amy Higginbotham, a retail
analyst at GlobalData, said: “Though it
acknowledged the need to modernise
the brand, there is still much work to
be done.”
In the UK, where Laura Ashley
makes most of its money, sales fell
almost 6pc to £223m for the year to
June 30, while total sales were down
£25m to £232m. It has warned on
profits twice this year.
The company also blamed Brexit,
with shoppers refraining from making
big-ticket purchases or starting big
DIY projects, as well as the brutal retail
environment.
Fresh data yesterday laid bare the
challenges retailers are facing, with
sales plunging in August at the fastest
pace since December 2008.
The CBI’s survey of how fashion
brands and supermarkets are doing,
showed that just 10pc of businesses
reported sales volumes higher than in
August last year, while 58pc said they
were lower. That gave a net balance of
minus 49pc – the worst reading since
2008 and the second-weakest since
records began in 1983.
“Sentiment is crumbling among
retailers, and unexpectedly weak sales
have led to a large overhang of stocks,”
said Anna Leach, CBI deputy chief
economist. “Retailers expect a chilly
few months ahead.”
The current state of affairs at Laura
Ashley is a far cry from its glory days.
In 1953, in a flat in Pimlico, Laura
Ashley and her husband Bernard set
up what would become one of Britain’s
greatest retail success stories. Inspired
by an exhibition at the Victoria and
Albert Museum she started printing
fabric and opened their first shop in
the Welsh market town of
Machynlleth in 1961.
The business was floated on the
London Stock Exchange in 1985 but in
recent years Laura Ashley failed to
move with the times and has arguably
been stumbling through the dark.
Last year plans to close a quarter of
its 160 stores were announced, to shift
focus on expanding in China. Six have
shut since with seven more to follow
this year. GlobalData’s Higginbotham
says Laura Ashley should increase that
pace, “especially underperforming
home stores”.
There are some green shoots,
though. More shoppers have beenBy Michael O’DwyerOCADO customers face disruption
ahead of the holiday weekend after fire
hit another of its robot warehouses.
Four fire engines and “around 25
firefighters” took more than three
hours to bring the blaze in Erith under
control on Wednesday evening, Lon-
don Fire Brigade (LFB) said.
The fire is the second faced by Ocado
this year. A major blaze in Andover,
Hampshire in February cost more than
£100m. Ocado refused to say how
many orders were cancelled or how
long it would take to clear a backlog of
deliveries after the latest fire.
The online grocer confirmed that a
“small fire” started in an outside hop-
per of waste packaging.
None of the material handling equip-
ment – robots that pick products for
customer orders – was affected. A con-
veyor belt and motor were damaged,
the LFB said.
The warehouse was evacuated as aresult of the fire, which Ocado said had
caused disruption to picking of items
and the cancellation of some orders.
Ocado said all affected customers
would be offered the chance to rebook
their orders for today. It refused to say
if it would use other sites to fulfil sales.
The grocer was forced to take a writ-
edown of £97m on the value of prop-
erty and machinery damaged in the
Andover fire. It also lost £5.6m of stock
as the blaze took 24 hours to be tamed.
Unlike this week’s fire, the Andover
incident began when one of the robot
pickers caught fire while recharging.
The cause of Wednesday night’s blaze
is under investigation, the LFB said.
A spokesman for the LFB said: “This
incident highlights the clear benefits of
sprinklers to businesses and we would
urge all companies and business own-
ers to install them.
“As well as limiting fire damage and
being potentially life-saving devices,
sprinklers and other fire suppression
systems help with business continuity
by minimising disruption and allowing
businesses to get back to normal as
soon as possible.”
Ocado said “fire suppression meas-
ures in place performed as intended
and the fire did not spread”.
Nobody was injured, the company
confirmed.
Shares fell 3pc to £12.05.Holiday food
fear as Ocado is
hit by second
warehouse fire
Business
snapping up its clothes, with like-for-
like sales up 9.2pc.
Fashion now accounts for a fifth of
retail sales and a recent tie-up to sellcycling shorts, bikinis and scrunchies
though Urban Outfitters – popular
with millennials – is a step in the right
direction.
Laura Ashley is also opening stores,
including a “very different” flagship,
Khoo said, at Westfield London as well
as more hotels and tea rooms,
although the firm would not say how
many. There are two hotels and nine
tearooms so far.
“There’s lots to be positive about,”
added finance boss Anglim. “Exposure
in China has been minor; we’ve made
very significant progress in our
hospitality business.”
Yet if things don’t improve sooner
rather than later for Laura Ashley, its
finance chief ’s vow that the company
will remain listed could be proved
wrong.Laura Ashley has
lost out to the
modern designs of
rival chains‘In recent
years Laura
Ashley failed
to move withthe times and
has arguably
beenstumbling
through thedark’
Grazia publisher Bauer swings
to operating loss as sales slide
By Chris JohnstonPROFITS at Bauer Consumer Media,
Britain’s biggest magazine publisher
with titles including Take a Break, TV
Choice, Heat and Grazia, tumbled last
year as sales continued to slide.
Pre-tax profits for the privately
owned German company fell £7m to
£3.7m – a figure flattered by the £6.1m
it received from unspecified disposals- on an £8.4m drop in turnover to
£120.3m, according to Companies
House records posted yesterday.
The company swung to a £2.8m op-
erating loss for 2018 compared with a
£9.4m operating profit the previous
year after taking a £20m writedown on
assets in Australia and New Zealand.
The disappointing results come de-
spite Bauer retaining its title as the
UK’s top magazine publisher, crowned
by TV Choice, the only title to sell more
than a million copies a week.
It also has Bella and Take a Break,
which both lead their categories, ac-
cording to the ABC circulation figures
for the six months to June released last
week. Bella sales fell 7pc compared
with the second half of 2018 to 154,000
copies, while Take a Break dropped
8pc to about 432,000.
Those falls were modest compared
with Cosmopolitan’s 32pc collapse to
206,510 copies – a decline that pub-
lisher Hearst blamed on a trial 50pincrease in the cover price to £2.50.
Meanwhile OK! magazine, now under
the umbrella of Mirror and Express
owner Reach, sank 19pc to 126,017.
Bauer’s stable of celebrity magazines
has been struggling amid the ongoing
popularity of websites such as Mail On-
line that can offer news and pictures farfaster than weekly print products. Heat
is down from almost 124,000 copies a
week in the second half of last year to
just under 117,500, while Closer has
sunk from almost 179,000 to 163,000.
Grazia sales dipped 2pc to just over
100,000 copies – a far cry from a peak
of about 230,000 a decade ago.
Rob Munro-Hall, chief executive of
Bauer Publishing UK, highlighted the
“standout performance” of its garden-
ing titles, adding that the company’s
portfolio offered “exceptional value to
advertisers”.
Bauer’s UK radio stations, which
include Kiss, Magic and Absolute, are
owned by a separate company.
While mass-market magazine pub-
lishers are finding the going difficult,
those with specialist gaming, sports
and hobby titles are enjoying bumper
sales. Future, whose magazines in-
clude FourFourTwo, Total Guitar,
Practical Caravan and PC Gamer,
toasted “record-breaking” half-year
results in May, with adjusted pre-tax
profits of £21.5m on sales of £109m.£3.7m
Pre-tax profits at Bauer. However it fell to
an operating loss of £2.8m, down from a
profit of £9.4m the previous year‘Challenger’ audit
pair in running for
Sports Direct job
GVC chief makes £5m bet
on Ladbrokes Coral owner
By LaToya HardingTHE boss of GVC has made a £5m bet
on the Ladbrokes Coral owner just
months after dumping a big stake in
the FTSE 250 company.
Kenny Alexander snapped up
833,334 shares at 588.2p each, sending
the stock more than 4pc higher to
614.6p and valuing the company at
£3.6bn. He now holds more than 2.5m
shares in GVC.
The purchase “demonstrates my
conviction that GVC’s strategy and
long-term outlook will provide share-
holders with strong returns”, said Mr
Alexander. He added: “I am confident
in the regulatory outlook in Germany
and the UK, and in the group’s opportu-
nity to take a leading position in the US
market. I remain totally committed to
GVC for the long term.”
Finance chief Robert Wood also
bought shares this week, along with
four independent directors.
The moves come just months after
Mr Alexander and chairman Lee Feld-
man shocked investors by pocketing
£13.7m and £6m, respectively, from
selling almost three million shares.Last week, the bookmaker, which
bought Ladbrokes Coral for £4bn in
March 2018, upgraded its forecast for
annual profits after a strong perfor-
mance online offset losses stemming
from tougher UK regulation. It now ex-
pects annual profits before interest, tax
and other costs to be between £650m
and £670m – higher than analysts’ ex-
pectations of £630m. GVC had previ-ously warned it could shut 1,000
Ladbrokes shops following the Govern-
ment’s move to cut the maximum stake
for fixed-odds betting terminals (FOBTs)
to £2. That figure was last week trimmed
to 900 shops.
Last month GVC was fined £6m by
the Gambling Commission for failing
to protect problem gamblers and over
anti-money laundering controls.By Harriet RussellMHA MACINTYRE and Mazars are in
the running to be Sports Direct’s new
auditors after previous bookkeeper
Grant Thornton quit last week.
The retail chain, founded by billion-
aire Mike Ashley, is scrambling to avoid
a possible suspension from the London
Stock Exchange. It has tapped a num-
ber of “mid-tier” firms about a tender
process, after the Big Four accountants
PwC, Deloitte, KPMG and EY were un-
derstood to have turned it down.
The two “challenger” firms were
said to have talked with Sports Direct,
as first reported by the Evening Stand-
ard. Mazars was in talks last year, but
said it needed more clarity around gov-
ernance at the chain and a higher fee. It
declined to comment.
MHA Macintyre did not respond to
requests for comment. Rakesh Shau-
nak, chairman, told the Standard while
it expected to take part in the process it
still wanted to know the “full reasons”
why Grant Thornton quit. Sports Di-
rect had said before only a Big Four
firm could manage its audit. Shares
closed up 2.6pc at 248.6p.Kenny Alexander,
the boss of GVC,
said he remained
‘totally committed’
to the company for
the long term£100m+
Cost of major blaze at online grocer
Ocado’s facility in Andover last February
after a robot picker caught fireNo longer in fashion,
despite opening tea
shops and hotels, the
retailer has analysts
asking why it’s listed,
Laura Onita finds
CAMERA PRESSThe Daily Telegraph Friday 23 August 2019 *** 33
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