Laura Ashley targets hotels and tea rooms to stir recovery

LAURA Ashley plans to ramp up its tea room and hotels business after the fashion and textile seller’s profits were wiped out last year by tough conditions on the high street and a one-off charge in Singapore.

Sean Anglim, chief financial officer, said the company was now looking at the hospitality sector “more seriously” as a means of driving customers back into stores.

Pre-tax profits slumped 98pc to £100,000 for the year to the end of June, as it booked a £4.7m impairment charge after writing down the value of a property sold in Singapore.

A wave of experimentation has hit the high street this year as retailers try to carve out a purpose for their bricksand-mortar stores to guard against the relentless march of online shopping.

Laura Ashley has two tea rooms inspired by its designs at the Regency Hotel in Solihull and at Burnham Beeches Hotel in Buckinghamshire. It also owns a hotel at Elstree and franchises a second hotel at Windermere in the Lake District.

Mr Anglim said: “Based on the consumer reaction to the hotels and the tea rooms, this is now something we are taking a bit more seriously. Over the coming years you will see more Laura Ashley-branded hotels with our products domestically and internationally.

“We have also had a full year to see how our tea room business has worked. Following the success of that we have opened another and we are looking at rolling this out on a bigger scale. This gives us the opportunity to drive customers back into our stores.”

Sales at the retailer, which is known for its floral fabric designs, slumped 7pc to £257m in the year to June as it closed eight of its 168 UK stores, while like-for-like sales at shops open more than a year slid 0.4pc. It has 213 franchised stores overseas.

Investors appeared to welcome the move, sending Laura Ashley’s shares up 20pc to 5.20p in early trade.