Retailer Laura Ashley today reported higher half-year earnings as increased clothing sales offset a slump in demand for furniture and decorating products.

Retailer Laura Ashley today reported higher half-year earnings as increased clothing sales offset a slump in demand for furniture and decorating products.

Underlying pre-tax profits for the 26 weeks to July 26 rose 13% to £4.5 million as group sales climbed 5.5% to £120.2 million.

Like-for-like UK fashion sales were up 6.7% but same-store sales of furniture dived 13.2% and the firm said it saw little sign of UK retail improvement.

Store openings boosted the half-year sales performance, with 20 new outlets increasing UK selling space by 11% to 835,000 sq ft. The UK portfolio comprised 225 stores at the end of July, with half of the sites being mixed product stores, 69 focused on home furnishings and another 32 being concessions.

Home accessories accounted for 28% of sales in the half year, with furniture generating 26%, decorating 24% and fashion 22% - up from 19% a year earlier.

The company said knitwear ranges achieved a third successive season of significant growth, while dresses also performed successfully.

The company added that gross margins increased by one percentage point in the first half of the year, reflecting better sourcing and product changes.

Operating expenses rose by 7.9% to £53.2 million, as a result of the new store openings over the year.

The company said: "Margin rates have continued to improve compared to the same period last year. However, the tough trading conditions experienced in the first half continue, with little sign of the UK retail market in which we operate improving."