Troubled home furnishing and fashion store Laura Ashley has announced the resignation of it chief executive and cancelled its annual dividend.

The announcement came as the firm unveiled a pre-tax loss of �4.9m ($3m) for the year to 25 January, compared with a pre-tax profit of �9.3m one year earlier.

The loss was in line with a shock profit warning issued in March. The company had previously forecast that it would break even over the year.

Laura Ashley blamed its flagging performance on "challenging" market conditions, with sales at its continental European stores hit particularly hard.

Revenues in continental Europe plunged by 15%, dragging its overall retail sales down by 4%.

Job split

The company said chief executive KC Ng would step down on 1 June, and announced plans to split the lead role between two new appointees - former Malaysian attorney general Ainum Mohd-Saad, and former Corus finance chief Rebecca Navarednam.

"We have chose to split the CEO's role because of the unique skills that the new joint holders of this position bring to the company," said Laura Ashley chairman Dr Khoo.

"I am confident that this structure will allow us to accelerate our strategy as a successful retailer in the UK."

Laura Ashley is pressing ahead with plans to close most of its stores in continental Europe. It aims to maintain a presence in the region through franchising operations.

The firm added that it was cancelling its dividend, an annual payment to shareholders, "in the light of the difficulties faced during the year."

Laura Ashley shares were up 0.25p at 6.375p in early trade.