N Brown remains positive in toughening market
N Brown began Thursday’s trading update with the positives. Citing its position as “a top 10 UK clothing & footwear digital retailer” the group said it saw continued growth in strategic product revenue for the 13 weeks to 28 May, “reflecting resilient performance against a prior year period”.
Clothing & Footwear demand drove performance, it grew its share of the online market during the quarter, it maintained its earnings guidance for Fiscal 23 and it continued to have a strong balance sheet.
It also said improved product is resonating with customers including strong sell-through rates on JD Williams' recently launched in-house-designed own-brand range Anise, and growth in demand for Jacamo's tailoring products.
It’s also experiencing further normalisation in the mix towards Clothing & Footwear, which represented 71% of product revenue (FY22: 66%), with strong performances in categories including formalwear and occasionwear.
IT’S NOT ALL GOOD NEWS
The downside is it’s also seeing mix-driven higher return rates.
And chief executive Steve Johnson said: “Sales volumes since the start of the financial year have been softer, reflecting various well-documented pressures on consumer confidence, which are showing no signs of abating in the short term. As these pressures persist, we expect the trading environment to remain challenging and will, therefore, continue to take actions to mitigate the effects wherever possible.”
So while those strategic brands — JD Williams, Simply Be and Jacamo — delivered a 2.5% year-on-year revenues rise to £75.2 million, overall product revenue slipped 0.6% to £106.3 million, heritage brands fell 7.2% to £31.1 million, and financial services dipped 4.8% to £58.8 million. That meant group revenue for the period was down 2.1% to £165.1 million.
It added: “The trading environment has been challenging since the start of FY23, with inflation impacting consumer confidence, resulting in softer volumes and revenue than anticipated at the start of the year”.
But Johnson added: “The board remains confident in the group's strategy and achieving its medium-term objective of delivering sustainable profitable growth.”
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