N Brown blames profit warning on ‘highly promotional market’

The fashion retail group said it expects its full-year adjusted profit before tax to be in the range of £70m to £72m, down from previous guidance of £78m to £84.1m.

N Brown group, which includes brands Simply Be, Jacamo, Ambrose Wilson and JD Williams, said product revenue was down 4% during the 18 weeks to January 4.

The financial services arm of the business fell to -4.6% during the period due to “lower product revenue” and the impact from previously announced changes to its lending practices.

Digital revenue increased 2.5% during the same period driven by growth from Simply Be and Ambrose Wilson.

N Brown chief executive Steve Johnson said: “Financial services revenue was down, reflective of our strategic approach to the retail business and continued tightening of our lending criteria.

“Our work so far has highlighted the need to have a tighter brand portfolio, a sharper focus on product and a cost base appropriate for delivering sustainable digital growth. At the same time, we will continue to proactively address the accelerating and cumulative external factors which are anticipated to reduce the size of our financial services business over the next two years.

“These will significantly influence the way we will operate our financial services business and we are taking proactive measures to ensure that the change is managed appropriately. This is in line with our strategy of becoming a digitally focused, retail-led business.

“Our expectations remain that the retail market will continue to be challenging and promotional, but we are focused on our clear strategy of delivering profitable digital growth.”