March 31 (Bloomberg) -- Laura Ashley Holdings Plc, the furnishings and clothing chain known for its floral designs, plunged in London trading after saying same-store U.K. sales fell in February and March as consumer spending slowed.
Same store sales dropped 4.2 percent in the eight weeks since Jan. 29, the company said today in a statement. The stock fell as much as 18 percent, the biggest intraday decline since June 2008, and traded down 3.3 pence, or 13 percent, at 22 pence at 10:41 a.m., making it the worst performer among the 626 companies in the FTSE All-Share Index.
Consumer spending is under pressure in Britain as government budget cuts and an increase in value-added tax to 20 percent from 17.5 percent at the start of the year undermined household confidence. February inflation accelerated to its highest pace since October 2008, according to figures released by the Office for National Statistics.
“It’s too early to judge because it is only eight weeks into the financial year,” Chief Executive Officer Lillian Tan said today in a telephone interview. “You will get a clearer picture at the half year.”
The decline in sales is a “general consumer sentiment” issue rather than specific to Laura Ashley, Tan said. Its e-commerce business, which represents 12 percent of U.K. sales, will account for an increasing proportion of revenue, she said.
Laura Ashley posted record profit for the fiscal year ended Jan. 29. Net income more than tripled to 19.8 million pounds, or 2.65 pence a share, from 5.8 million pounds, or 0.8 pence, Laura Ashley said in the statement. Revenue rose 6.2 percent to 285 million pounds ($459 million).
The impact of the 9-Magnitude earthquake and subsequent tsunami on its business in Japan, where it has 80 stores, will be “quite minimal,” Tan said. Laura Ashley has 240 stores outside the U.K., which accounts for 90 percent of all revenue.
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