Iverson backed to remain at Laura Ashley
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Your support makes all the difference.John Thornton, the powerful chairman of Laura Ashley and friend of 35 per cent shareholder Sir Bernard Ashley, is backing Ann Iverson to stay as chief executive, according to a source close to the beleaguered group.
Ms Iverson, the hard-driving American who is paid over pounds 1m a year, has been under pressure amid signs that her two-year attempt to turn the company around is failing.
Laura Ashley shares have fallen from 166p to 52.5p - near to their all- time low - in just seven months, as the company has been forced to issued profit warnings and seen the sudden exit of senior executives.
Last week, the company lost its chief designer when Colorado-born Basha Cohen resigned, only 18 months after being brought in to revamp the Laura Ashley clothing range. The company has moved away from its prim floral frocks, but sales of replacement lines aimed at younger women are failing to catch on.
Slow-moving fashion sales and an over-ambitious revamp of the 180- store chain in the US are at the heart of the company's problems, analysts say.
"The stock will remain under a severe cloud, and the steady outflow of people makes you wonder how long the top remains untouched," said Peter Jones, analyst at stockbrokers Peel Hunt.
Mr Thornton's backing, and signs that the top investment banker at Goldman Sachs plans to take a more active role at Laura Ashley, comes as Ms Iverson prepares to issue an unusual trading statement next week. This is designed to calm fears in the City that Laura Ashley might soon be forced into a big stock write-off after slowing sales and a rise in unsold merchandise.
According to the source close to the company, Ms Iverson's statement will be gloomy but not shocking, and Laura Ashley will at least make some profit this year.
In June, the company's own stockbroker, Dresdner Kleinwort Benson, halved its pre-tax profit forecast to pounds 8m for the current trading year ending next January. Last year, Laura Ashley made pre-tax profits of pounds 16.5m, and Ms Iverson received nearly pounds 1.2m in total compensation.
The profits downgrade followed the company's shareholders meeting where Laura Ashley revealed that sales growth so far this year had slowed.
"We believe they were a little economical with the truth at the shareholders meeting," said Richard Ratner, analyst at Mees Pierson. "Nevertheless the brand has some value left."
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