Brand Resurrection - Never Out Of Reach

For lessons in branding there are few richer case studies than Laura Ashley. In the 50s Laura Ashley began silk-screening her own designs onto scarves and napkins. Drawing her inspiration from Victorian images, her work was unusual and sold well at John Lewis and Heal's. She quickly became associated with floral designs, a country idyll and a brand new vision of the past.

Like most founders of great brands, Ashley was a unique woman whose vision encompassed creativity and business.

In the 60s production was moved to Wales, Ashley's birthplace, and diversified into furnishings and Victorian dresses. In 1969 the movie Butch Cassidy and the Sundance Kid opened across Britain; co-star Katharine Ross, in her vintage dresses, started a fashion sensation that Ashley's designs spoke directly to. Five hundred stores, from Paris to New York, now offered the world a new fashion brand.

Ashley died in 1985, but the success of the brand continued. Laura Ashley was floated on the stock market that year, turnover reached £300m and production was expanded.

The death of a founder is a big challenge for any brand, as they are usually the physical representation of it, the creative spirit behind product development and the protector of the brand equity.

The key lessons for marketers are that they need to be aware of the effect this can have and must understand that a negative impact on brand strategy rarely has an immediate effect on the bottom line. When brands stray from their equity the effects on turnover and profitability are usually delayed, but always imminent.

By 1995 the vacuum created by Ashley's absence had halved the share price and left the brand with annual losses of £30m.

Cue the arrival of US turnaround specialist Ann Iverson as chief executive. She installed her own team, expanded the stores and increased the range and diversity of Laura Ashley products.

Initially the results were positive, but two years later it became clear that Iverson's expansion strategy had been a big error. Huge new stores required an enormous range of products to fill them, but the brand could not support such a large inventory and sales could not match expectations.

The production costs were astronomical and the company announced a profit warning. A series of brand-destroying sales promotions were launched and Iverson resigned.

Iverson's tenure is a perfect illustration of how not to run a brand revitalisation. Your first move must always be to consolidate and cut back, not to expand a shaky house whose foundations need restrengthening and restructuring.

In 1998, close to collapse, the brand was purchased by Malaysian conglomerate MUI, which provided another salutary lesson in brand mismanagement. MUI hired and fired a continual stream of in-effective chief executives, many with no direct experience of fashion marketing. By 2005 the brand had been run by 10 chief executives in 14 years. No brand can survive that. There is a direct correlation between boardroom stability, strategic consistency and long-term brand success.

But there is a glimmer of hope. No matter how badly mismanaged, great brands are indestructible. They may lie dormant for decades, but in the hands of a great marketer, with a mix of a vision for the future and an understanding of brand heritage, revitalisation is always possible.

30 SECONDS ON...LAURA ASHLEY

- Laura Ashley was born in Merthyr Tydfil, Wales, in 1925.

- At 18 she married Bernard Ashley and set up home in a flat in Pimlico where she began her career.

- The success of the brand has been credited in part to Audrey Hepburn, who appeared in the 1953 film Roman Holiday wearing a headscarf. The look took off just as the Ashleys were producing their first batch of headscarves, tablemats and napkins.

- The couple set up their first factory in Kent in 1955, where they traded as the Ashley Mountney Company.

- On her 60th birthday, Ashley was admitted to hospital after falling down the stairs at her daughter's cottage in the Cotswolds. She spent the next nine days in a coma before passing away.

- At the time of her death, the company was set for further expansion. A year later Bernard floated the £200m company on the stock market. In 1998, the group was bailed out when MUI bought a 40% stake.

- Ms Lillian Tan, who has been chief executive since January, plans to reduce fashion from 22 per cent of sales to 14 percent - with stores cutting back the space they give to clothes in favour of home furnishings, now the most profitable part of the business.

- The company has returned to profitability, posting profits of £12 million for the year 2006/2007.

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