"A NATION OF shopkeepers," was Napoleon's dismissive putdown for the British. But during the 1980s, when the retail revolution was at its height, it was an epithet to be proud of. High street giants, such as Marks & Spencer, along with niche retailers such as Body Shop and Sock Shop, were expanding overseas with the enthusiasm of 19th-century colonialists. The British - never the tastiest fashion plates in Europe - were teaching their continental cousins how to shop.
The 21st-century high street tells a different story. While home grown companies such as M&S struggle to retain their British customers, overseas retailers such as Zara, Mango and H&M have snapped up prime sites on our cities' main thoroughfares along with the affections of the fashionable but budget-conscious British shopper. We may feel ambivalent about sharing a constitution with mainland Europeans, but we are more than happy to raid their wardrobes.
If any retailer sums up the demise of le shopping Anglaise, it is Laura Ashley. The brand which could once wow them from Tokyo to Texas is now the fading bloom on the high street. Laura Ashley's struggle is particularly perplexing as this year is the perfect comeback year for the label. As if by some rare alignment of the planets, frocks, florals and gypsy boho - the quintessential LA ingredients - have come together for the first time in ages to be the dominant look of the summer. Earlier this year Harpers & Queen paid homage to Laura Ashley's heritage.
But the company has failed to capitalise on its trademark look. A miserable start to 2005 has been consolidated by the news in recent weeks that the company is closing its flagship store on London's Regent Street because of rent increases. Last month it launched a 28m law suit against L'Oreal, which manufactured the Laura Ashley perfumes. At Christmas, the chain parted company with the Scottish couture designer Alistair Blair, who had previously designed for Dior and Givenchy. There have been rumours - denied by the company - that it is planning to pull out of clothing altogether.
The group, on its 11th chief executive in 14 years, is now run by the Malaysian conglomerate MUI Asia Ltd, which rescued the company from the receivers in 1998. 58 per cent of the shares are believed to be controlled directly or indirectly by the company's chairman Dr Koo Kay Peng, and there are allegations that he has filled the board with his friends.
The management's stated intention is to shrink the fashion side of the business. Lillian Tan, who has been chief executive since January, plans to reduce fashion from 22 per cent of sales to 14 per cent this year. In recent weeks, stores across the country have cut back the space they give to clothes in favour of home furnishings, the most profitable part of the business.
Maureen Hinton, senior analyst with leading retail consultancy Verdict, says: "The company no longer has strong handwriting. It hasn't been able to adapt its offering for its customers who grew up with it in the 1970s and 80s. That 35-plus age group, which ought to be its core customer base, has abandoned it for niche boutiques or for a much younger look."
Blair, who left "by mutual consent" at the end of 2004, was brought in to give Laura Ashley a radical makeover. He was asked to take the brand in a more youthful direction but, when he produced younger styles with a tighter fit, he was accused of alienating the group's traditional customers.
Richard Ratner, retail analyst with the investment bank Seymour Pierce who has followed Laura Ashley's fortunes for more than a decade, says: "They brought in Alistair Blair to turn mutton into lamb. The problem is he changed all the sizing and the mutton couldn't fit into the lambs' clothing."
The company also played around with pricing. "There were some very odd price points," says Hinton. "You'd see something and think: 'Why is that that price?'"
It's all a far cry from the company's roots. In the 1950s, a young couple called Laura and Bernard Ashley started to make headsquares, tablemats and napkins out of fabric they had dyed and printed themselves from the kitchen of their flat in Pimlico. By 1960, they had moved to Kent with their four children and expanded into oven gloves, aprons and gardening smocks before opening a factory in Laura Ashley's native Wales.
In 1966 Laura Ashley produced her first dress for social occasions. Its long silhouette became her signature look and preempted the switch in fashion from mini to maxi at the end of the decade. The 1970s to the mid-1980s was the company's heyday. It expanded rapidly with outlets in Paris, Australia and North America. In Japan, the brand achieved cult status.
Pre-Raphaelite girls modelled the clothes in Vogue and the look was epitomised by Catherine Ross in the movie Butch Cassidy and the Sundance Kid. At universities around the country, students drifted about in Laura Ashley's smocked corduroy pinafores and puff-sleeved frocks. At country weddings, the bridal party plus half the guests would turn up wearing her designs.
The Ashley children were soon roped into the business. David, the eldest son who is now in his early fifties, designed the shops; daughter Jane was the company photographer; another daughter Emma and their second son Nick were part of the company's fashion design team. Sir Bernard Ashley was the company chairman and Laura kept a close eye on fabrics. The astonishing success of what proved to be the ultimate cottage industry, bought the Ashleys a yacht, a private plane and a French chateau.
In 1985 on her 60th birthday, Laura Ashley fell down the stairs and was seriously injured. She died in hospital ten days later. The tragedy for the family was compounded by the fact that the company was about to float on the stock market, minus its leading light and driving force. But such was the hype about the company and the retail sector in general in the mid-1980s that, two months after her death, the flotation was 34 times oversubscribed. The share price of 135p allowed the family to realise capital of almost 40 million. Today, Laura Ashley is worth just over a third of its 1985 value.
By the end of the 1980s, Laura Ashley was distinctly out of fashion. It was an era of power dressing. Women were making inroads in the boardroom. Sharp suits and shoulder pads were at odds with everything Laura Ashley stood for. Sir Bernard's larger-than-life personality and idiosyncratic style of management meant that he fell out of favour with the City. The launch of a children's range and a furniture range helped deflect the looming crisis but by 1997, after a torrid few years and numerous chief executives, the company was in serious financial difficulties.
Although Sir Bernard was made honorary life president, the family's ties with the business are now broken. The Ashley children have spoken of the wrench. Much of the manufacturing has moved from the Welsh factories to the Far East. Family and friends say that Laura Ashley regarded the workforce as her extended family but that it is difficult to retain that degree of company loyalty when there have been so many changes at the top. The independent shareholders are now agitating for the Malaysians to take the company fully private and buy out the rest of the shares, which are languishing at around 12p.
Maureen Hinton does not believe the company will pull out of fashion altogether: "They have fashion franchises on the continent which they have to supply and they have interests in manufacturing in Malaysia. They will concentrate more on the home furnishing side of the business which has done much better than the clothing range and which may have benefited from M&S pulling out of home furnishings."
The company, which still has outlets in continental Europe, the Middle East, Asia, Australia and South America, is planning more stand-alone furniture shops in Britain.
Hinton does not believe that Laura Ashley's decline from fashion icon to cast-off was inevitable. "It's a fabulous brand," she says. "If you want to see how a company caters for an ageing clientele, look at Jigsaw which has developed the sub brand Kew for its older shoppers or look at the way River Island has reinvented itself. It started life as Lewis Separates. Then it was Chelsea Girl and then River Island. It has been selling to 15 to 25 year-olds for decades but it has continually reinvented itself to capture the moment."
One problem for Laura Ashley is that its clothing has to appeal to the same kind of people who buy the furniture, which limits its scope for chasing new customers. As the company struggles to capitalise on its once famous image, it seems that Laura Ashley is forever caught between a frock and a hard place.