N Brown taps up investors for £100m fundraising as half-year profits fall

N Brown’s new equity raise will be structured as a placing and open offer at a price of 57p per share and be fully underwritten by current majority shareholder Lord Alliance, who has a 45% stake in the business.

The capital raise comes alongside N Brown’s intention to move its listing from the main market to the junior AIM exchange.

Funds raised will be used “to strengthen the balance sheet and allow targeted investments to accelerate delivery of growth strategy to capitalise on the structural tailwinds in the group’s markets”.

Alongside its equity fundraising, N Brown reported a 29% decline in adjusted profit before tax to £23m and a 18% fall in group revenue to £357m.

The retail group’s sales declined 29% in its first quarter, with the rate of decline stemming to 12% in the second quarter. N Brown launched a homewares division called Home Essentials in April, which has resulted in the group’s home and gift sales rising 25% year on year.

Chief executive Steve Johnson said: “Our core, streamlined fashion brand proposition, supported by ever-more sophisticated digital capabilities, has driven a recovery in product sales since the initial impact of the pandemic.

“This has been supported by a strong uplift in home and gift sales following the launch of our new Home Essentials brand, with customers looking to improve their homes amid the UK restrictions. We also continue to support customers wishing to use our flexible credit solutions.

“Having restructured the business and transitioned to more than 90% of revenues from digital, we now see a clear opportunity to capitalise on various industry drivers, not least the increasing trend towards online retail, and further improve our customer proposition.

“Today’s separately announced proposed capital raise will give us the firepower to invest further in our digital capabilities and accelerate our growth strategy, whilst significantly strengthening the Group’s balance sheet to provide us with ongoing flexibility and a strong platform from which to deliver attractive returns for all of our shareholders.”