LONDON (AP) -- Laura Ashley, hailed as a great British retailing success story until falling on hard times, said yesterday that it will sell or close most of its factories and cut its work force by one-fifth in an effort to survive.
The retailer of English country-style women's clothing and home furnishings operates nearly 500 stores worldwide, 185 of them in the United States.
Its shops, recognizable by their dark-green fronts and blackberry-sprig motif, are best known for their flower-print, Victorian-style dresses.
In a drastic switch, the company said it had decided to largely abandon manufacturing its own apparel because it can be bought much more cheaply from outside suppliers.
The move is part of a year-old cost-cutting program, the company said. It blamed the strong British pound and high inflation for its woes.
Seven of its nine factories in Britain and Ireland will be closed or sold, and 1,500 of its 8,150 jobs will be eliminated, the company said.
Stock of Laura Ashley Holdings has suffered along with the company's fortunes. It traded at the equivalent of $1.12 a share yesterday on London's Stock Exchange, unchanged from Wednesday. That is less than half the price at which investors snapped up the shares when the company went public in 1985.
Money-losing Laura Ashley is not the only troubled British retailer. Many operators have suffered from 15 percent interest rates, engineered by the government to curb inflation by slowing consumer spending. The annual inflation rate is running at 10.6 percent.
Another of Britain's one-time retailing stars, the sock chain Sock Shop International PLC, fell into the hands of administrators earlier this year.
Laura Ashley said it will retain enough of its own manufacturing to respond to changes in market needs. It said it will continue printing its own fabrics and wallpaper as well as making its own curtains.
Chairman Bernard Ashley said in a statement, "If Laura Ashley is to survive in today's highly competitive environment," it can no longer supplyits stores worldwide with garments made in its British factories.
For years, the company's strategy was to be a fully integrated retailer by making what it sold.
In late August, Laura Ashley moved to raise cash and inspire confidence by selling a 15 percent stake to the Japanese retailer Jusco Co. for $56 million. The Ashley family, with the Ashley Foundation, retained a 59 percent stake.
The company, which had been expected to report its half-year results this week, said they would be released in the middle of next month.
The late Laura Ashley and her husband, Bernard, began the clothier as a small cottage industry in a London apartment 37 years ago. They printed fabrics on their kitchen table.
The couple expanded into garments, accessories, wallpaper and soft furnishings. They opened their first store in 1968.
The Welsh-born Mrs. Ashley died of head injuries in September 1985 at the age of 60 after falling down steep stairs at her daughter's home in western England.