Laura Ashley sets the pattern with rising profits and overseas surge

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FASHION and furnishings retailer Laura Ashley is poised to deliver increased profits this year after reporting an acceleration in sales growth since the start of its second half, boosted by rising overseas orders and the launch of services for smartphone users.

Increased demand from internet shoppers has also seen department store group John Lewis enjoy record weekly sales, as all three of its Scottish branches returned to growth in the run-up to Christmas.

Laura Ashley, famed for its floral prints, said like-for-like sales during the 19 weeks to 8 December were 4.9 per cent higher than the same period last year – accelerating from the 3.9 per cent growth it reported for the first half of the year and ahead of analysts’ forecasts.

Online sales jumped 22.6 per cent and the group, which is controlled by Malaysian conglomerate MUI, said: “The introduction of a mobile site that offers the complete range of our products, and increased overseas deliveries, have both been instrumental in this growth.”

Freddie George, retail analyst at Seymour Pierce, noted the online growth had outpaced the 21.4 per cent increase seen for the first six months of the year and said the firm was “well on track” to delivering a pre-tax profit of around £20 million for the full year, up from £18.8m.

He added: “Encouragingly, gross margins are expected to be only marginally lower in the year, after having declined by 2.5 percentage points in the first half when it was impacted by adverse product mix and a higher level of discounting.”

So far this year, Laura Ashley has closed three stores and opened five. The group has about 210 outlets in the UK and more than 260 franchised stores across 29 countries, including Australia, Chile and Japan.

Meanwhile, John Lewis said all three of its Scottish branches enjoyed rising sales last week, with Glasgow posting the second-largest increase among its 39-strong estate.

The employee-owned retailer said turnover for the week to 8 December totalled a record £142m, driven by a 46 per cent jump in online sales. Its Scottish stores, which suffered a decline in sales the previous week, returned to growth, with Glasgow showing the largest increase of 13.1 per cent. Sales at Edinburgh were 7.8 per cent higher than a year ago, while Aberdeen was ahead by 1.7 per cent.

The colder weather pushed up sales of coats and cashmere, while accessories such as scarves and gloves also saw a marked uplift. John Lewis said shoppers had also shown “insatiable” demand for tablet computers such as Apple’s iPad.

Retail services director Barry Matheson said: “There was a slight heart flutter early in the week when snow fell across parts of Scotland and north-east England but, as the snow thawed, customers returned to shopping with a vengeance.

“From both a one- and two-year perspective, the stand-out performance came from Glasgow.

“There was definitely a northern theme to the results, with Liverpool, Edinburgh and Trafford all in the top six.”