New chairman wants fewer but larger stores in UK and is keen to expand presence in China

This article is more than 1 year old

This article is more than 1 year old

Laura Ashley is to close 40 stores, representing a quarter of its UK outlets, in a move that puts hundreds of jobs at risk.

The company’s new chairman, Andrew Khoo, who took on the role from his father last week, said the stores were closing amid a “challenging environment” in the UK that had hit sales of expensive products such as furniture.

Khoo told the Press Association that he wanted fewer but larger stores in the UK and was also keen to expand Laura Ashley’s presence in China.

Laura Ashley, which is known for its floral prints, is the latest chain to announce store closures amid tough times on UK high streets. Clothing and furnishings retailers have had a particularly difficult year as a result of unseasonable weather as well as low consumer confidence and a stagnant housing market linked to Brexit uncertainty.

Chains including New Look, Marks & Spencer, House of Fraser and Carpetright are closing large numbers of their stores as they try to adapt to the switch to online shopping as well as the consumer spending downturn.

The Sports Direct founder, Mike Ashley, gave a dire warning for the sector last week when he described November as “the worst on record, unbelievably bad”.

Laura Ashley, which is listed in the UK but controlled by the Malaysian group MUI, has been struggling for a number of years. In August the company reported a dive in pre-tax profits and sales as the demand for furniture dropped again.

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That came after the company issued its third profit warning in 12 months in February, hit by adverse currency movements and a slump in demand for furniture and wallpaper in the UK.

Khoo said Laura Ashley had seen an uptick in clothing sales in the run-up to Christmas but he added: “It’s a challenging environment and it could become more challenging.”

However, he remains positive about the UK despite the threat of Brexit uncertainty. “My long-term view of the UK is I have confidence in the UK and we will continue to invest in the UK. As long as Laura Ashley stays relevant there’s no reason we can’t get over this little speed bump,” Khoo said.