N Brown full-year profits slip amid infrastructure investment

The fashion retailer said statutory pre-tax profit tumbled 20.2% to £57.6m in the 53 weeks to March 4.

On a 52-week basis, statutory pre-tax profits were down 23% to £55.6m.

N Brown said adjusted pre-tax profit, excluding exceptional charges, dropped 6.5% to £82.6m on a 53-week basis.

Adjusted pre-tax profits slipped 8.7% to £80.6m on a 52-week basis.

The JD Williams, Jacamo and Simply Be owner warned earlier this month that exceptional charges for its full year would be in the region of £24m to £27m, higher than the £12m previously guided, due to financial services customer complaint redress.

Redress ‘error’

N Brown admitted it had made “an error” in its previous calculations for redress and underestimated “the likely future costs arising from complaints relating to financial services products sold in the past.”

Despite those exceptional costs of £25.2m denting its bottom line, N Brown hailed sales gains across its three power brands, as product revenues increased 3.4% to £627.2m in the 52 weeks to February 25.

Ladieswear produced its best performance for almost a decade, as sales advanced 4.2% compared to the previous 52-week period.

JD Williams was the star performer, growing sales 12% across the year.

Simply Be and Jacamo registered 9.9% and 4% jumps respectively.

Partnerships progress

N Brown said it was making “good progress” on brand and retail partnerships as it unveiled details of a new tie-up with supermarket giant Tesco.

Under the terms of the partnership, the fashion business will sell a collection of Simply Be and Jacamo lines on the Tesco Direct clothing and general merchandise website.

It comes as N Brown continues to grow its own websites at a pace, with ecommerce revenues up 10% year-on-year.

Online penetration hit 69%, while the rate was even higher to 77% for new customers, up five percentage points year-on-year.

N Brown said 71% of all its online traffic now comes from mobile devices.

Challenging economy

The retailer’s chief executive Angela Spindler said she was “pleased with the progress” made during the year and hailed the accelerating of performance during its second half as a result of the company’s “enhanced ability to flex our product offering in-season.”

However, Spindler warned: “The macro-economic backdrop remains challenging for retail. Against this backdrop we remain vigilant over our core costs and efficiencies.

“We are also continuing to invest in improving our capabilities and customer experience to enable future profitable growth.

“The past few years have seen a huge amount of change in the business. We remain on track to complete the final stages of our systems programme by Summer 2018.”