Laura Ashley plc
Laura Ashley plc (LSE: ALY) is a Welsh textile design company now controlled by the MUI Group of Malaysia. It was founded by Bernard Ashley, an engineer, and his wife Laura Ashley in 1953 then grew over the next 20 years to become an international retail chain. Sales totalled over £276 million in 2000. Its products can be described as quintessentially English.[1]
Origins
After World War II, Bernard Ashley met Welsh secretary Laura Mountney at a youth club in Wallington, London. While working as a secretary and raising her first two children, part-time she designed napkins, table mats, tea-towels which Bernard printed on a machine he had designed in an attic flat in Pimlico, London [2] The couple had invested £10 in wood for the screen frame, dyes and a few yards of linen. Laura's inspiration to start producing printed fabric came from a Women's Institute display of traditional handicrafts at the Victoria & Albert Museum. When Laura looked for small patches carrying Victorian designs to help her make patchworks, she found no such thing existed. Here was an opportunity, and she started to print Victorian style headscarves in 1953.
Audrey Hepburn inadvertently sparked the growth of one of the world's most successful fashion and home furnishing companies. Hepburn appeared alongside Gregory Peck in the 1953 film Roman Holiday, wearing a headscarf. As such a fashion icon, she instantly created a style that became popular around the globe. The Ashleys' scarves quickly became successful with stores, retailing both via mail order and high street chains such as John Lewis
From 1953, Bernard left his city job and the couple began to expand the company, named Bernard Ashley Fabrics. Laura designed the prints and Bernard built the printing equipment, so forging a complementary partnership that was to give the company its unique strength throughout the years. Laura remained in charge of design until shortly before her death, while Bernard handled the operational side.
Employing staff to cope with the growth of sales, the company name was changed to Laura Ashley because Bernard felt a woman's name was more appropriate for the type of products.
Expansion
The new company moved to Kent in 1955, but the business was nearly wiped out in 1958, when the River Darent overflowed - leaving equipment, dyes and fabrics floating in three feet of water.
Turnover rose from £2,000 to £8,000 in 1960, which left them looking for new premises. As the new M1 Motorway had just been built, Laura suggested Wales as there was lots of space, and driving up the new road one weekend, found a suitable house and shop available for a sum below their residual savings in Machynlleth, Powys.
The family moved to Wales in 1961, just after the birth of their third child. The first shop opened at 35 Maengwyn Street, which still today trades as an interior design shop, and the Laura Ashley association is commemorated by a small plaque. The family lived above the shop for 6 years before moving to Carno, Montgomeryshire.
The Ashley's first "Welsh" factory was originally located in the social club in Carno; in 1967 the factory moved across to the village's former railway station.
These were crucial times in the development of the company. Bernard had developed his flat-bed printing process to produce 5,000metres of fabric per week, and in 1966 Laura produced her first dress for social rather than work attire. The long length silhouette became the Laura Ashley trademark. It also was to work successfully in the company's favour, as fashion switched from the mini to the maxi skirt at the end of the 1960s — a newspaper suggested that by donning a Laura Ashley number, women could look as beautiful as Katharine Ross in the film Butch Cassidy and the Sundance Kid.
Retail shops
The first shop under the Laura Ashley name opened in Pelham Street, South Kensington, in 1968, with additional shops opened in Shrewsbury and Bath in 1970. In one week alone, London's Fulham Road shop sold 4,000 dresses - which resulted in the new factory in Newtown, Montgomeryshire. It was the opening of the Paris shop in 1974 which was the first to feature the distinctive green frontage and stripped wooden interior; and in the same year the first USA shop opened in San Francisco. A licensing operation led to the opening of department store concessions in Australia, Canada and Japan from 1971 onwards.
By 1975, turnover was £5million per year and the company employed 1,000 people worldwide. Laura turned down the offer of an OBE (she was upset Bernard had not been offered one) but a Queen's Award for Export was accepted in 1977. Turnover reached £25 million in 1979, and a range of perfume was launched. The addition of a home in France enabled Laura to go back to her roots of fabric design, and the company launched its home furnishings collections.
Public company
Two months after Laura Ashley's death in 1985, Laura Ashley Holdings plc went public in a flotation that was 34 times oversubscribed. The 1980s saw the knighthood of Sir Bernard Ashley, and the launch of additional child and home furnishings ranges.
In the early 1990s, Laura Ashley plc was suffering from a combination of over expansion of its retail outlets and dependence on what had become an overly complex and costly outsourced network of manufacturers. In 1991, American James Maxmin, Ph.D. became the CEO at Laura Ashley, after pressure on the autocratic Sir Bernard. Over the next two and a half years, Dr. Maxmin led a series of changes, fixing problems in manufacturing and logistics that foreshadowed principles of his later book, The Support Economy, co-authored with his wife, Harvard Business School Professor Shoshana Zuboff. For example, he entered into a strategic alliance with FedEx, forming a sort of proto-federation, aimed at improving distribution for close to 500 Laura Ashley stores. The alliance was established as a 10-year partnership, but it was relatively open-ended, premised on trust. The objective was to be able to supply 99 percent of Laura Ashley's merchandise to customers anywhere in the world within 48 hours. The alliance replaced a legacy system that would route a T-shirt manufactured in Hong Kong to a warehouse in Newtown, Wales, before sending it to a retail store in Japan.
In 1992, Dr. Maxmin led Laura Ashley to its first profits since 1989, and in 1993 profits were expected to reach £12 million. But in early April 1994 Dr. Maxmin abruptly resigned from Laura Ashley, citing major differences with Sir Bernard over strategy.[3]
Laura Ashley celebrated its 40th anniversary in 1993, the same year that Sir Bernard retired as chairman and became honorary life president. The Ashley family retain an interest in the business and its development. 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.
MUI Asia takeover
In May 1998, MUI Asia Limited became a major shareholder in Laura Ashley Holdings plc and under the new management, this world famous international brand was back in profit. Rescued 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 Khoo Kay Peng.[4]
But the company failed to capitalise on its trademark look - probably due to employing its 11th chief executive in 14 years. It closed its flagship store on London's Regent Street in late 2005 because of rent increases, and in March 2005 it launched a £28m lawsuit against L'Oréal, which manufactured the Laura Ashley perfumes. At Christmas 2004, the chain parted company with couture designer Alistair Blair, who had previously designed for Dior and Givenchy.
Ms 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 - with stores cutting back the space they give to clothes in favour of home furnishings, now the most profitable part of the business.
The Laura Ashley brand is now represented in the USA largely through licensing agreements. All of its stores there have now closed and the business as a whole is separately owned from that of its parent company in the UK.
The Company was criticised in 2009 for price discrepancies, which meant Irish customers were charged more than their UK counterparts for the same items.[5]
References
- ↑ Funding Universe. Company Histories & Profiles: Laura Ashley Holdings plc.
- ↑ Copestake and Mounteney Newsletter 2
- ↑ www.thesupporteconomy.com/about-authors/
- ↑ The Scotsman
- ↑ Reilly, Jerome (4 October 2009). "Price is not right at Laura Ashley outlets". Irish Independent. Retrieved 6 January 2011.