LONDON — Increased overhead costs and weak sales in Europe pulled Laura Ashley, the U.K. home furnishings and apparel company, into the red during the first half of the year.

The company said Wednesday that the net loss for the six months ended July 27 totaled $1.4 million versus a $2.6 million profit in the year-ago period. Sales rose 6.5 percent to $210 million, while same-store sales were flat. Dollar figures have been converted from the pound at current exchange rates.

The firm noted that, in addition to sales weakness, costs linked to the opening of a new distribution center in Leicestershire had led to evaporation in bottom-line results.

Overall, sales growth was driven by demand for home furnishings, which represents two-thirds of the business. The company said that new sales points and an expanded product offering helped boost sales 14 percent year-over-year. Laura Ashley opened five home furnishings stores during the first six months of the year.

Laura Ashley’s fashion division did not fare as well in the first half. Total retail sales slid 8 percent, while comparable-store sales were down 7 percent. The company said the decline was due to an "overcautious" approach to stock levels among the company’s wholesale customers and "extremely difficult" trading conditions in continental Europe, especially France and Germany.

"We clearly have a lot of work to do building up the fashion business," Diana Bourne, Laura Ashley’s head of public relations, told WWD.

She added that the firm would focus on franchising as a way to drive the apparel business forward.

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