Laura Ashley was under financial strain, he thought the British company was worth saving. Download the PDF For easy printing you can download the PDF version of this case study. If you do not have Adobe Reader you can download a free copy. Laura Ashley fashion and home furnishings are popular all over the world. The company has come a long way since Laura and Bernard Ashley started printing fabric on their kitchen table in London in 1953. The couple’s ? 0 investment for a screen, dyes and some linen was a humble start to the company. Twenty years later in the 1970s, its overall sales had grown to ? 300,000 through their shops in the UK and licensing operations as far afield as Australia, Canada, the US and Japan. Fast facts Company: The MUI Group/ Laura Ashley Country: Malaysia Industry: Retail & Distribution Website: www. lauraashley. com The company continued to flourish throughout the 1980s. Whilst the UK market remained strong, the 1990s brought financial troubles to the company that largely arose from their operations in the United States.
By 1998, the company was heading towards insolvency. That’s when the MUI Group stepped in. “MUI has a reputation for buying ailing companies and turning them around,” says Lillian Tan, Chief Executive of Laura Ashley. “It’s a diversified group with international business in retailing, food, hotels, property, travel & tourism, stock-broking and insurance. Since Malaysia is part of the Commonwealth, the UK was a natural place for MUI to expand its operations. The two countries share similar education, legal, financial and regulatory systems, and there’s no language barrier.
The Essay on Laura Ashley and Federal Express Strategic Alliance 2
The basic agreement between the two companies, Laura Ashley (LA) and Federal Express’ Business Logistics Service (BLA) is, to work together and develop each other business. This is done by, BLS handling the global distribution of LA and there by BLS utilizing all of its capabilities on a global basis, to refine its own skills and open up large new potential market for the future. Though, there are ...
And crucially, the UK also has flexible rules and regulations that make it easy for foreign companies to operate here. ” Acquisition In the late 1990s, MUI Chairman Tan Sri Dr KP Khoo was looking for an international brand to expand MUI’s retailing business which, until then, was largely confined to Malaysia. It took just one meeting with the then Chairman of Laura Ashley, John Thornton, to convince Dr Khoo that MUI was able to save the company and steer it back to profitability. So, in 1998 MUI acquired a substantial stake in Laura Ashley with Dr Khoo himself taking a significant shareholding in the company.
Shortly after the acquisition, MUI recognised that the company’s operations in the United States were a major drain on its resources and began to formulate a strategy to deal with this problem. “One of the main contributing factors that brought about Laura Ashley’s financial difficulties was the fact that the company had expanded too aggressively in the US,” says Tan. “It had taken on large stores with long leases at high rents, but did not have an adequate range of products to fill up these stores. This business strategy was just not sustainable and cost the company the support of its bankers.
Financial institutions simply refused to lend them any more money. ” Back in the black After careful analysis of Laura Ashley’s business and strategy, MUI’s solution was to close down stores in North America that were unprofitable and to renegotiate more realistic leases with landlords of the stores they kept open. The next step was a management buyout that also involved investment by another MUI company. As a result, the US company became a master licensee of the UK company. This corporate restructuring exercise in the US, coupled with strategic decisions taken by the UK headquarters, helped Laura Ashley to make a turnaround in 2000.
Unfortunately, two years later the European recession of 2002 hit the company. However, MUI took a long-term view of its investment and adopted a different business strategy for its European operations by franchising most of its European stores while retaining only the stores in France. At the same time, it continued to expand its stores in the UK. This strategy paid off and in 2003, Laura Ashley returned to profitability again. “Since then, Laura Ashley has continued to grow,” says Tan. “Between 2005 and 2007 profits almost doubled each year. As a result, the company was able to pay dividends for three successive years. Lessons learnt Today Laura Ashley is in a strong position with 450 stores around the world and is well placed for further expansion. “We are even planning to resume operating stores in the US on our own or through our franchise partners”, says Tan. “But, we are mindful of the lessons we have learned. We will ensure that the right business model is applied and we will identify suitable locations in a phased programme of store opening. ” Helping hands When Lillian Tan was offered the position of Chief Executive Officer of Laura Ashley in 2005, she had to move to the UK at short notice.
The Business plan on Laura Ashley Holdings Plc
1) How have changes relating to management and organisational structural affected a global organisation of your choice, over the last 75 years. Relate your findings to growth, distribution, and various external influences and strategies. 2) Undertake a SWOT analysis and explain its relevance in relation to your company and/or its sector Word Count 1250. Harvard Style Referencing. Bibliography ...
Knowing that immigration procedures usually take time, she contacted UK Trade & Investment for help. “The UK Trade & Investment advisers I spoke to were very helpful and professional,” says Tan. “They intervened to speed up my visa application and directed me to relevant officers. Even after I was settled here, they continued to make follow up calls to see how I fared and whether I needed further help.
