Gloom for Laura Ashley and Carphone Warehouse

Laura Ashley has filed for administration amid the coronavirus (Covid-19) outbreak - and Carphone Warehouse is to close more than 530 of its stand-alone stores.

It seems these announcements are not purely down to the coronavirus situation, though - but this has undoubtedly been a contributory factor. So what exactly has brought these two top retail names to this?

Amy Higginbotham, Retail Analyst at GlobalData, a leading data and analytics company, says: “Laura Ashley blames recent poor trading (at least in part) to the Covid-19 outbreak, and though this has no doubt had a significant impact on its performance over the past week or so, the retailer has been struggling for a while.

“The brand has long been tired and has struggled to regain relevance in both its fashion and home divisions. Financially weak retailers, of which there are many, are likely to follow Laura Ashley into administration given the current crisis. Those retailing non-essential purchases that can easily be deferred will be particularly badly hit.”

And in response to Dixons Carphone’s announcement that it is closing all 531 standalone Carphone Warehouse stores, Zoe Mills, retail analyst at GlobalData, says “After a number of years of double digit declines in its mobile business, Dixons Carphone’s decision to shutter its standalone Carphone Warehouse stores is a necessary step to protect profits and adjust to the changing dynamic of the mobile phone market.

"With its mobile business expected to make a £90m loss this year, Dixons Carphone’s decision arguably comes a little late given that it is a destination for mobile phone contracts and the market has been moving towards phone ownership rather than contracts for a long time.

“Retaining a presence in big Currys PCWorld stores will help alleviate shoppers’ concerns around existing contracts and being able to access support, but store closures will ultimately make the electrical specialist a less convenient option in the future.

"As its competitor AO invests in its online mobile business, the closure of Carphone Warehouse stores will not be the end of its changing mobile strategy and it must focus on simplifying the shopping process. Utilising its big box stores to sell mobile devices without a contract, should be a focus as Apple ramps up its efforts on driving sales through its stores, further increasing its presence in the market through financing options and a high level of customer service.

“So far, Dixons Carphone has not significantly been impacted by the outbreak of Covid-19, aside from its travel stores. Shoppers panic buying has boosted sales as they invest in fridges, freezers, small domestic appliances and laptops in preparation to isolate at home.”