Magazine article Marketing

Life Begins at 40 for Laura Ashley

Magazine article Marketing

Life Begins at 40 for Laura Ashley

Article excerpt

Laura Ashley is celebrating its 40th anniversary this year with a return to profit. The straw hat to sofa global brand has emerged from its mid-life crisis with renewed energy. Sally Bain reports

Life can begin (again) at 40 for businesses too -- at least it has for the Laura Ashley Group which celebrates its 40th anniversary this year. The recent announcement of a return to profit for the first time in four years is described by chief executive Jim Maxmin as "modest -- but a milestone". Now with some well-pedigreed executives on board the company is finally tapping into the considerable strength of the Laura Ashley brand and releasing its full potential on an international basis.

There is no doubt that Laura Ashley as a company has gone through a pretty traumatic mid-life crisis over the past four years, and it probably all goes back to 1985. This was the year when the founder Laura Ashley died in an accident and was also the year the company went public with a flotation which was 34 times oversubscribed.

Suddenly, there was a huge amount of money available and rapid expansion ensued: by 1987 there were 325 stores in 13 countries. Bernard Ashley (Sir Bernard from 1987) continued to head the firm, but the departure of Mike Smith as chief executive in 1989 left a gap which was not to be filled until Maxmin arrived in September 1991.

Customers who had known and loved the Laura Ashley look in the 60s and 70s found in the 80s that the company had lost its way, the brand became submerged as it felt uncomfortable with the power dressing of the decade and had no strong leader to guide it through the era of the shoulder pad. Most significantly, the company lost touch with its customers.

One of Maxmin's first statements as chief executive was to admit that Laura Ashley had expanded very rapidly and had "lost sight of what kind of company it is and lost focus on its core". He promised: "We will re-establish that -- the customer will be the new focus for the company." One of the first visible things he did was to put a message (actually the company's mission statement) on to the swing tickets of the clothing. It reads: "Our purpose is to establish an enduring relationship with those who share a love of the special lifestyle that is Laura Ashley. We will act to protect the integrity of that relationship and to ensure its long-term prosperity."

Maxmin's career spans Unilever, Volvo and ThornEMI. He is a cool, laid-back American, described by one of his colleagues as "inspired". He found out what was happening at Laura Ashley by going out to the front line and talking with the shop staff. So important does he think this is that all directors are now asked to spend two days every six months on the shopfloor, talking with staff and customers. Also, all managers spend three hours every quarter on the Customer Complaint Line -- "an enlightening expeience", he says.

Marketing director Lesley Exley joined Laura Ashley in September last year from the Alexon Group. All the marketing initiatives she has already undertaken and plans for the future are focused on building up a much stronger relationship with the customers. "It's a word-of-mouth repeat-purchase kind of marketing," says Maxmin, whose marketing spend is 2|pounds~m. It is starting to reap rewards: in the first three months of this year garment sales in the UK were 25% up on last year, and much work has been done on improving the design of the merchandise.

Exley says: "I was a Laura Ashley customer in the 70s as were many of my friends. But in the 80s the brand became less top-of-mind, less relevant. When I was approached to join the firm last year I saw how Jim Maxmin had started to revive the brand, and realised it had enormous potential. There was a lot going on in the boiler room customers didn't know about."

As a brand, probably Laura Ashley's greatest strength now is that it really is in tune with the caring, sharing 90s. …

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