N Brown sales hit by fears in run-up to election and Budget

Chief executive Alan White said that the stream of “negative rhetoric” surrounding the election and Budget had influenced customer behaviour. Sales across the group rose 1.1% and like-for-likes by 0.1%.

“Because our customer is older than average, uncertainty preys on their mind more than most,” said White.

However, he maintained: “In practice, those people will feel it is not quite as bad as expected. Now there is certainty.” Although he did not expect a spending “boom” soon, White said he thought trade will return to more “normal” levels.

Investec analyst David Jeary said: “Management believes that the Budget measures should be a small net positive to its customer base. This is because of pension increases, the return of the earnings link for pensions and the £1,000 increase in the personal allowance.”

He said that Investec is likely to modify forecasts. “Gross margin is down 20 basis points compared with guidance of a 30 basis points decline, with cost savings expected to offset this,” said Jeary.

“We are likely to make a small precautionary cut in our pre-tax profit numbers of 1% to 2%, awaiting next news of the impact of bad debt management on turnover and gross margin.”

Panmure Gordon analyst Jean Roche said: “We continue to rate N Brown a buy due to the company’s exposure to a niche market and its increasing exposure to online clothing sales.” Online sales now account for 41% of N Brown’s total sales.

White said many areas of the business are being developed.

Its international operation is being rolled out: Simply Be goes live in the US next week and 1 million catalogues will be sent out in late August.

Its recent acquisitions of menswear offer High & Mighty in September and etailer Figleaves last month also offers growth opportunities, he said.

N Brown has just relaunched the High & Mighty website with a new logo and integrated it with its web platform so it can take advantage of cross-selling opportunities with its other brands.

The retailer has also added a home and electricals offer to the site, which it says has been successful with its other menswear brands such as Jacamo.