Laura Ashley to shut UK stores and pivot to China

British fashion and furniture retailer Laura Ashley is to close 40 of its stores in the United Kingdom and expand its presence in China.

The company's newly appointed executive chairman, Andrew Khoo Boo Yeow, confirmed to the Press Association that the company will close a quarter of its 160 UK stores, having already shut eight this year.

Khoo also said the company is considering opening its first bricks-and-mortar stores in China, where Laura Ashley products have been available to online shoppers since 2016 via Alibaba's e-commerce platform Tmall.

Often labeled as one of Britain's "heritage brands", Laura Ashley has recently contended with plunging profits amid adverse high-street conditions in the UK.

"It's a challenging environment and it could become more challenging," Khoo said. "We're moving to Asia in a much bigger way. We have a regional office in Singapore, it's a dedicated office of about 10 people and it's focused purely on e-commerce into China. Once we get a significant foothold in digital retail in China, we can look at the physical stores rollout."

Khoo said he is mulling the expansion of some of the stores that will remain in the UK, enabling them to take on some of the employees from the closed shops.

"The direction I want to go is to have not so many stores, but maybe the ones we have could be larger," said Khoo, who is the son of former Laura Ashley executive chairman Khoo Kay Peng. "It's more showcasing the brand. It doesn't really matter if they buy online or offline, we just want them to get inspired."

Laura Ashley was founded in 1953 and its floral prints became hugely popular in the 1970s and 1980s. Khoo Kay Peng's Malaysia-based business group Malayan United Industries Berhad became a major shareholder in Laura Ashley in 1998.

Industry analysts have criticized Laura Ashley for failing to remain relevant as consumer trends have evolved. The company has struggled to evolve at a time when online shopping has dealt a blow to many bricks-and-mortar retailers.

Laura Ashley had pinned hopes on the recent launch of a new e-commerce platform. However, profits have gone on to plummet 98 percent from 6.3 million pounds ($7.94 million) in 2017 to 100,000 pounds in 2018, due to a decline in sales and an impairment charge on the sale of a commercial property in Singapore.

The last decade has seen the collapse of several well-established high street brands in Britain, including department store British Home Stores, retailer Woolworths, electronics retailer Maplin, and Toys R Us UK.