TOM STEALS HOT DESIGNER FROM COMPETITION - Laura Ashley shares hit as designer quits
By Jane Merriman
LONDON, July 30 (Reuter) - Laura Ashley Holdings Plc, the British fashion and textiles group, saw
its shares slide 10 percent on Wednesday after news that another top executive had quit the
company.
The retailer, made famous by its floral dresses and taffeta party frocks, announced that design and
buying director Basha Cohen was leaving to join U.S. fashion firm Tommy Hilfiger Corporation.
Cohen's departure marked the latest in a series of management upheavals at the firm, which has been
battling to revitalise flagging sales and profits.
Over the past couple of months two other senior executives have resigned, including merchandising
director Julie Ramshaw.
American-born chief executive Ann Iverson, hired two years ago to turn the business around, said in
a statement Cohen had made a significant contribution to ``repositioning'' the Laura Ashley brand. A
company spokeswoman said Cohen had received a very good offer from Hilfiger which she could
not refuse.
Retail analysts said Cohen's departure was another blow to the group, which now had no design or
merchandising director.
The management defections, plus speculation about major stock problems in the United States have
raised doubts about Iverson's recovery strategy.
``The shares are worth a lot less than when Ann Iverson arrived,'' said one retail analyst who asked
not to be identified. ``The revival strategy has backfired horribly and Laura Ashley is back to square
one,'' he said.
Iverson, credited with the turnaround of British childrenswear chain Mothercare (SHS.L), has come
under increasing pressure after Laura Ashley issued a profit warning in April.
The firm's shares have spiralled lower since then, reflecting growing concerns about Iverson's ability
to deliver the goods on profit growth.
The stock stood 6.0 pence down at 49.5 pence after the announcement that Cohen was to leave.
Iverson's appointment in 1995 to rejuvenate the tired Laura Ashley brand was seen as something of
a coup. She was hailed as a potential saviour of the company, which had had several failed attempts
to put profits back on track.
But now Laura Ashley's future looks as shaky as ever, the shares are at their lowest for three years
and Iverson's high flying reputation is on the line, retail analysts said.
They said company broker Dresdner Kleinwort Benson recently cut its profit forecast for the current
year to eight million pounds ($13 million), against 16.2 million last year. And they suggested the
retailer could make a loss when it publishes first half results in September.
An update on current trading is expected in the next two to three weeks.
The firm, founded in a Welsh village in the fifties by husband and wife Laura and Bernard, became
an international success in the 1960s and 1970s. But it lost its way in the 1980s and 1990s after
overexpansion, and poor management.
Its trademark floral prints, trendy in the 1970s, lost their appeal and the group has struggled to find a
new identity.
Iverson's strategy was to expand the higher margin home furnishing business in Britain and the U.S.
Perceptions that her plans to turn the group around were going badly have already prompted
speculation in the British press that her days at Laura Ashley may be numbered.
``She may be thinking about what to do next,'' said another retail analyst.
Bernard Ashley, whose family has around 35 percent of the company, is said to be taking a more
active management role after seeing the value of his shares plummet.
More news for related categories and industries: textiles, international.
Additional news and quotes: Tommy Hilfiger Corp - TOM.
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