Home and fashion retailer Laura Ashley Holdings plc (LON:ALY) sank in early trading Wednesday after it warned on annual profits amid a swing to a loss in the first half.
The firm’s chairman, Andrew Khoo, said that due to “continued market turbulence” and “difficult” trading conditions in the first six months, results for the full year would “fall short of market expectations”.
READ: Laura Ashley set to close more UK stores as it focuses on Asia
Results from the first half did little to assuage the gloom, with the group reporting a pre-tax loss of £1.5mln compared to a £4.3mln profit a year ago while sales dropped 8.7% to £122.9mln.
The company blamed the slump on a 4.2% drop in like-for-like (LFL) sales, the closure of 4 of its stores and the termination of a license agreement with its previous Japanese partner.
Earnings were also dragged lower by sharp drops in the group’s Furniture and Decorating segments, which saw LFL sales plunge 14.4% and 13.5% respectively.
This was partially offset by a stronger performance in its fashion arm, which reported an 11.8% increase in LFL sales.
The difficult UK market has been an issue for Laura Ashley for a while, with the firm announcing in December that it planned to shutter 40 UK stores in order to focus on growing its presence in China.
Shares were down 5.2% at 3p.