Laura Ashley pins hopes on concept hotels after profit warning 

Laura Ashley is pinning its hopes on a chain of concept hotels as it looks to broaden its appeal after its third profit warning in a year and the cancellation of its dividend sent shares tumbling.
The company, known for its floral clothing and fabric designs, announced plans to license its Laura Ashley Hotels concept in the UK and internationally, “building on the success” of its Belsfield Hotel in the Lake District.
Sean Anglim, chief financial officer, said that the number of hotels it works with would be "more than one and less than 200" and could be based in both rural and urban settings. The roll-out is expected to take two to three years, he said. 
Shares in Laura Ashley fell as much as 18pc at the open but recovered to trade 1.6pc down at 6p after the fashion and furnishings retailer said full-year profits would be below market expectations and it scrapped its interim dividend.  
The retailer blamed the weak pound for a 45pc drop in pre-tax profits to ?4.3m in the 26 weeks to December 31. 
Laura Ashley pins hopes on concept hotels after profit warning 

Sales of furniture and decorations were the biggest drag on performance for the retail business
Sales fell 7.7pc to ?134.7m and were down 0.5pc on a like-for-like basis. Laura Ashley’s chairman, Khoo Kay Peng, said the company’s online performance “remains strong”, though digital sales were up a fairly modest 5.1pc at ?26.9m.
The company is working on a relaunch of its website, making it "more functional".
Mr Anglim said that sales of furniture and decorations were the biggest drag on performance, and that the company was refocusing on those areas, launching new products in its Spring 2018 line. It will also attempt to appeal to a younger demographic with more "diversity" of products later in the year, amid what he called a "competitive" market.  
The company's core demographic for home furnishings is currently middle-income over-35s, while the fashion business appeals to "older" customers, he said. 
Neil Wilson of ETX Capital questioned whether the pound was to blame for Laura Ashley's woes, noting that the currency was "broadly higher" against the US dollar in 2017. He said that the brand's bigger problem was that it had not kept up with trends or remained "relevant". 
"The Laura Ashley Hotel concept may deliver a marginal boost to earnings but it won’t fix the core brand’s decline," he said. 
Dr Khoo said: "Trading conditions have continued to be challenging during the first six months of the [financial] year. The impact felt due to the weakening of sterling, year on year, was the most significant single factor in the fall of profit before tax.
“Our customer base continues to grow worldwide and we strive to give all customers the product and experience they expect from Laura Ashley. I remain confident that Laura Ashley will continue its progress and that the company is well positioned to make this happen.
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