Third Party Problems Delay Laura Ashley UK Site

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Laura Ashley has pushed back the debut of a UK Web site to the fall after efforts to put one online in April failed because partner went bankrupt.

Initially, the site had been slated to be operational last November, but Laura Ashley said Blueberry was unable to deliver on the ambitious project. The site aimed to sell clothing and home furnishing and then move onto gifts, accessories, shoes and handbags after the Web site became established.

"What happened was that the holiday season came after Blueberry's initial failure," said spokeswoman Katya Wright, "so given Christmas and our January sales that followed it was just not a good time to launch. Two months before Blueberry folded we realized that it wasn't working. They had great ideas but lacked the technical expertise to see them through, so we terminated Blueberry and signed up with another UK firm, DCS."

Laura Ashley has a catalog operation in the UK and in Europe so that the needed backend infrastructure is in place. Orders will be handled by a call center and delivered from a warehouse. Both are located in Wales.

The site, however, will only sell to British buyers.

The company has been in a financial bind for several years following a rapid over-expansion in the US in the '90s when then CEO Ann Iverson opened too many new stores in an effort to capitalize on the Ashley brand.

As a result, the company was restructured and stores in the United States were sold off to management for a dollar. All U.S. stores are now franchise operations.

Malaysian United Industries, a Kuala Lumpur-based conglomerate that owns hotels, retail properties and other projects, bought the remaining company.

"They sold off things, restructured, got cash and stabilized the company financially," Wright said.

U.S. franchise fees help Laura Ashley's bottom line but the firm is focused on the UK market in the near term. Catalog sales were always important and they have been growing at a 40 percent clip recently.

Americans will not be able to buy directly from the new site, Wright said, "there is a U.S. Web site, which can be linked to from the UK site."

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