Apr 25, 2013
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Online growth drives N Brown profit

Apr 25, 2013

(photo: SimplyBe.com)

LONDON - British home-shopping group N Brown met forecasts with a 2.6 percent rise in 2012-13 profit, as it sold more goods online and benefited from customer recruitment initiatives and an improved product offering.

Shares in the Manchester, England-based group, which targets older and larger shoppers with brands such as Simply Be, Jacamo and Marisota, rose 5.5 percent on Wednesday after it also said it had made a positive start to its new financial year.

With shoppers fretting over job security and a squeeze on incomes, many British retailers are struggling.

Earlier this month Marks & Spencer, Britain's biggest clothing retailer, posted a fall in fourth quarter underlying sales of general merchandise, while Tesco reported a 52 percent slump in year profit.

N Brown has generally bucked the gloom, however, and its shares have risen 87 percent over the last year.

The company raised its full-year dividend 5 percent and said it was confident about the outlook for 2013 despite an expectation that market conditions will remain tough.

"I think the environment will get mildly more helpful but if we want to drive the business it's down to things we do ourselves," Chief Executive Alan White told Reuters.

The group is evaluating whether to expand a trial of seven physical stores in Britain and is stepping up investment in the United States - launching dedicated websites for Marisota and Jacamo to complement Simply Be.

N Brown made an underlying pretax profit of 96.4 million pounds ($147 million) in the year to March 2 - in line with analysts' average forecast of 96 million pounds.

Revenue increased 6 percent to 784.7 million pounds, with e-commerce sales up 15 percent to 424 million pounds.

Sales online now account for 55 percent of the total, with over a quarter of these now being transacted on smartphone and tablet devices.

It said like-for-like sales were up 6.1 percent in the seven weeks to April 20.

White, who has been at N Brown since 1985 when annual sales were 42 million pounds, is retiring in July and will be succeeded by Angela Spindler, currently CEO of The Original Factory Shop.

White plans to pursue a non-executive career.

N Brown shares were up 5 percent at 444 pence at 0759 GMT, valuing the business at around 1.25 billion pounds.

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