UK clothes retailer Laura Ashley has announced a return to profit with pre-tax earnings of �1.7m ($2.4m) in the first half of 2000.

This compared with a �7m loss in the corresponding period last year and comes despite tough times in the high street for clothing retailers.

The firm, which has suffered management upheavals in recent years and is now 40% owned by Malayan United Industries, said it was the first time it had made a profit for three years.

"Conditions in the high street remain variable and unpredictable. However, we are encouraged by an increase in like-for-like sales of 14% and an increase in like-for-like margin of 17% for the first seven weeks of the second half," chief executive KC Ng said in a statement.

Stand-out performer

Laura Ashley said last year's results had been hit by losses in its US business, which was sold in July 1999.

This year, the company had sold more items at full price and also successfully expanded its range.

The company is also revamping its image. "We are not frilly and flowery any more," a Laura Ashley spokeswoman told Reuters.

"We are moving much more into the sort of clothes that people want to wear nowadays that aren't necessarily what you would have thought of as traditional Laura Ashley territory."

Some 60% of Laura Ashley's UK stores had been refitted and restyled with a new contemporary look while the stand-out performer had been the home furnishings division.

The company said it would now open up to 100 home furnishings only stores and would close its 36 home furnishings departments in Sainsbury's Homebase shops.

Some 12 new franchise stores are planned to be opened this year worldwide including in Ukraine, Saudi Arabia and Turkey, Laura Ashley said.

The company also said it was on course to launch an online shopping service at the beginning of November.

No dividend has been proposed.