When asked about that, Mr Khoo said the brand has been seeing double-digit growth in monthly sales in China.
“Purely based on having a presence online, I think that’s very promising,” he said. “Being such a large market, there will always be opportunities for us if we enter China in the right manner.”
On what he means by “right manner”, the chairman stressed the need to find a local partner.
“Especially when the time comes to open a physical store, we’ll need to find a franchisee or joint venture partner. We will never go alone. It’s too risky.”
SINGAPORE HQ TO DRIVE EXPANSION
At the moment, a 10-man team in Singapore takes charge of the venture in China.
The local office, set up in 2015 to be the brand’s Asian headquarters, also manages the franchisees in some Southeast Asian markets where there are plans for a “more dedicated push”.
For instance, the brand has appointed a new franchise partner in Thailand and is looking to add two more locations in the country this year.
In Singapore, its only store in Orchard Road could be in for a facelift to include a Laura Ashley tea room, which would be a first in Asia.
“The UK and other European markets have matured and while we hope to continue growing these markets, I think a more significant potential is in Asia,” said Mr Khoo.
“That’s why we set up an office here in Singapore to get closer to the region.”
He stressed that the recent sale of its office building here will not thwart this strategy.
The team in Singapore has until the second quarter before it needs to vacate the existing office building in Paya Lebar. The chairman said the search for a new space “at a reasonable price” is ongoing.
“As business grows in Asia, we will continue to grow the team here.”
STAYING AHEAD
Still, the sale of the Singapore office building was a significant dent on its annual report card.
Pre-tax net profit for the year ending in June 2018 slumped 98 per cent to 100,000 pounds (about S$174,400), as it booked a 4.7 million pounds impairment charge on the value of property. The eight-storey building was sold at 30.3 million pounds to SB Investment.
“It did pull down the company’s results,” said Mr Khoo. “You can say it was a conservative view to have a stronger cash position given the headwinds.”
“The building was bought when the Singapore market was stronger. Could we hold on and wait for the market to recover? Of course we can, but how long will that take?
Noting that the office building has been under-utilised by its small team here, he added: “Since we are not a real estate company, we decided to sustain a one-year hit and take the cash.”
Even with the recent profit warnings, Mr Khoo emphasised that Laura Ashley remains a profitable business. “We just need to take a long hard look at the business and take some decisive actions.”
The shuttering of 40 stores in the UK, which will be done over the next three to four years, is one way to “right size” the business.
To appeal to a younger and more budget-conscious crowd, the company also spruced up its e-commerce platform and tweaked product offerings.
For instance, the company’s new “Editions” range features homewares designed with a contemporary twist and priced “30 to 40 per cent cheaper”.
“This will cater to consumers who love our brand but find us slightly out of reach. The modern designs with smaller sizing will also fit the lifestyles of younger consumers, who now live in smaller apartments,” said Mr Khoo.
Together with the diversification into the hospitality sector by running hotels, spas and tea rooms, the 66-year-old brand hopes to stay ahead by evolving into a “complete lifestyle experience”.
“If we remain as a fashion retailer or a home furniture retailer, we will be easily replaced or substituted,” said the newly minted chairman, who took over from his father last month.
“We have to recognise that and becoming a complete lifestyle experience that cannot be replaced elsewhere will be how we can face the threats head on.”
Source: CNA/sk