N Brown profits and sales slump in ‘year of restructuring’

In the 52 weeks to February 29 the fashion retailer saw adjusted profit before tax fall 29% to £59.5m, while group revenue slumped 6% to £858m.

Since the coronavirus pandemic struck UK shores in March, N Brown reported that group revenue was down 22%, while product sales had plummeted 29% but had rallied somewhat over the last three weeks to be down 21%.

In what it called a “critical year for the group’s transition to digital”, N Brown reported that 85% of all product revenue for the period was generated through digital channels. Both womenswear and menswear saw a 5.5% sales upswing online.

Since March, the number of online sales have now topped 91% with the digital launch of its newest Home Essentials brand on April 1.

N Brown, which owns brands such as Simply Be and Jacamo, also said it had driven operating costs down 10% through “better targeted, data-driven marketing spend” and had seen a “material increase” in statutory profit to £36m through lower exceptional charges.

Since the pandemic, N Brown said it had improved its liquidity and reduced its debts which, as of June 19, were down 10% to £448m.

The retailer also unveiled its five-part “refreshed strategy to support sustainable future growth”, which includes: offering distinct brands, improving the product, new categories for customers, enhancing the digital experience and offering flexible credit.

N Brown chief executive Steve Johnson said: “The business has responded strongly to the challenges posed by the Covid-19 outbreak, highlighting our resilience as a business and I thank every single one of our colleagues who have worked so hard to keep us operational, with safety and our customers in the front of their minds.

“The crisis will cast a lasting shadow over the sector, but we are confident that our agile approach and attractive brand offerings, with clear target customer segments, position us well to navigate the issues and emerge as a stronger business.

“In a year of restructuring for the group, Simply Be, JD Williams, Jacamo and Ambrose Wilson all grew digital revenue and following further progress in the first quarter of this financial year, 91% of our product revenue now comes from digital channels.

“The retail environment remains heavily promotional and the regulatory challenges in financial services have required us to adapt and evolve our offer, but our commitment to driving operating efficiencies is creating the right platform for the future.

“Trading in the first quarter of this financial year was impacted by Covid-19, but sales in recent weeks have shown an improving trajectory and cash collections have been stable. Operating costs are significantly lower than last year and net debt has decreased.”

He continued: “As we move forward, we have refreshed our strategy, evolved our key pillars of growth and are pushing on with further work to streamline our brand portfolio, improve our product, create a brand new home proposition whilst improving our digital capabilities and developing our financial services offer.

“Challenges remain in the year ahead, but we are focused on accelerating the business and are confident we are taking the right actions to create a sustainable, profitable business for the long term which has the potential to generate significant value.”