N Brown considers closing 20 stores as footfall remains weak

N Brown Group Plc, in its trading update covering the 13 week period to June 2, 2018 said that the group revenue increased 0.4 percent, while product revenue was down 2.8 percent. Total online revenue increased 3 percent and power brand online revenues were up 9 percent. Focussing on becoming a global online retailer, the company added that it has undertaken a review of its store estate and may consider closing its 20 stores ahead of lease expiry.

Commenting on the update, Angela Spindler, the company’s CEO said in a statement: “As highlighted in our full year results, this was a challenging period for fashion retail. Against this backdrop and a double-digit comparative in product revenue, I am satisfied with our Q1 performance. In line with our online strategy, and given continued weak high street footfall, we have today commenced a consultation process with colleagues over the future of our small store estate.”

Review of N Brown’s financial update

Under the product categories, sales of ladies wear dropped 4.2 percent, of men’s wear declined 3.2 percent and footwear and accessories were down 5.4 percent, while home & gift saw an improvement of 0.8 percent. Revenue at JD Williams declined 2 percent, but increased 9.3 percent at Simply Be and 2 percent at Jacamo.

The company said, 75 percent of total revenue are now generated online. For new customers, online penetration was 84 percent, up 6ppts year-on-year and overall traffic was up 3 percent and traffic to power brands was up 14 percent. Smartphones now account for 57 percent of all sessions, up from 51 percent last year, with mobile devices as a whole accounting for 75 percent.

International revenue was down 8 percent or down 5.2 percent in constant currency terms. Revenue from the USA was down 15.9 percent, and down 7.2 percent in constant currency, impacted by significantly reducing investment in offline recruitment, in line with the company’s wider strategy. Revenue from Ireland was flat, or down 3.2 percent in constant currency terms.

In FY18 these stores generated 15 million pounds (20 million dollars) revenue (2 percent of Group revenue) and an EBITDA loss of 3 million pounds (4 million dollars. The company anticipates that the consultation process on closure of stores will be completed around the time of its half-year results in October and should the decision be taken to close all 20 stores, N Brown anticipates an exceptional cost of 18 million pounds to 22 million pounds (24 to 29 million dollars).

Picture:Jacamo via MHP Communications