Laura Ashley

Essay by seimii April 2006

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Laura Ashley Holdings plc: The Battle for Survival

The principal activities of the Laura Ashley Holding Group are the design, manufacturing, sourcing, distribution and sale of clothing, accessories and home furnishings. The Group acts through tow divisions: Retail, which reflects sales through Laura Ashley managed stores, Mail Order and Internet, and Non-retail, which includes licensing, and franchising, although the retail sector represents the bigger one. The company operates in the UK, Ireland and Continental Europe and to some extent in the US market.

Although the former CEOs of Laura Ashley Holdings plc have conducted several cost cutting and restructuring strategies, Ng Kwan Cheong, who took over as chief executive of Laura Ashley Holdings in February 1999, faced declining sales and increasing operating losses.

Despite the increase in equity through the injection of 43.5 million pounds of the Malayan United Industries Group (MUI - a diversified Malaysian corporation) that acquired 40 % of the Laura Ashley Holdings in 1998 and the sale of 13 % of Laura Ashley Japan to Laura Ashley's Japanese partner Jusco, which brought in 7.9

million pounds, the Laura Ashley Holdings couldn't improve the financial stability as most of this equity was absorbed by debt payment, restructuring and closure costs, and continuing operating losses.

Problems which were faced by the new CEO Ng Kwan Cheong:

Although the problem of delivering a single and unique message concerning the brand of Laura Ashley products was resolved by consolidating design, buying and merchandising, the principle areas of their business into their head office of Fulham/London, there was still the problem with the garment brand. As Laura Ashley Holdings is trying to reach new customers by modernizing its fashion/design, it may confuse core/key customers who associate with Laura Ashley the traditional clothing. So the reputation of Laura Ashley Holdings as a...