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N Brown reports 20.2 percent drop in full year pre-tax profit

By Prachi Singh

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Business

N Brown Group revenue was up 2.5 percent to 887.7 million pounds for the 53 weeks ended March 4, 2017, with product revenue up 3.4 percent and financial services revenue up 0.4 percent. The company's, statutory pre-tax profit, however declined 20.2 percent to 57.6 million pounds (74 million dollars) in the 53 weeks, while on a 52-week basis, the same was down 23 percent to 55.6 million pounds (71 million dollars). Adjusted pre-tax profit, excluding exceptional charges, of 82.6 million pounds (106 million dollars) dropped 6.5 percent on a 53-week basis and declined 8.7 percent to 80.6 million pounds (103 million dollars) on a 52-week basis.

Commenting on the company’s annual results, Angela Spindler, Chief Executive, said in a statement, "I am pleased with the progress made this year, as we continue to build on our position as an agile, online fashion retailer. The past few years have seen a huge amount of change in the business. We remain on track to complete the final stages of our systems programme by summer 2018. We are focused on driving the business forward, both in the UK and internationally, and I am very confident in our prospects."

Power brands perform well

Revenues of the company’s power brands accounted for 54 percent of group product revenue compared to 52 percent last year. JD Williams' product revenue was 158.3 million pounds (203 million dollars), up 4.7 percent. Within this, the JD Williams brand was up 12 percent and Fifty Plus was down 9 percent. The brand’s online revenue was up 19 percent year on year.

Simply Be had a strong performance, with product revenue up 9.9 percent to 114.2 million pounds (147 million dollars). Simply Be active customers were up 20 percent year on year. Jacamo product revenue of 65.3 million pounds (84 million dollars), increased 4 percent, with revenue performance strengthening through the year. Active customers grew double-digit year on year, but the company said, spend per customer was lower due to the subdued market backdrop, particularly in the first half.

Secondary brand revenue increased by 1.6 percent to 155.2 million pounds (199 million dollars). N Brown said, Fashion World was the strongest performer, up mid-single digit year-on-year driven by increased spend per customer. Marisota, which is now predominantly used as a product brand focusing on fit solutions, also saw a positive performance. Figleaves revenue was slightly down year on year. High and Mighty revenue was down year on year as we continued to transition the brand from a predominantly stores to online model, with 11 fewer stores compared to two years ago.

Traditional segment recorded revenue of 134.2 million pounds (172 million dollars), down 1.3 percent year on year. This overall result masks a significantly improving trend, said the company, with revenue down 4.2 percent in the first half but up 1.6 percent in the second half.

USA posts 8.5 percent sales growth

For the 52 weeks February 27, 2017, USA revenue was 15.5 million pounds (19 million dollars), up 8.5 percent but down 4.2 percent in constant currency terms. The operating loss was 1.3 million pounds (1.6 million dollars), compared to 1 million pounds (1.2 million dollars) in FY16. The company said, performance in the second half was impacted by the launch of the new USA website but it added that the USA remains a key future growth lever for the business, so 100 million pounds (128 million dollars) revenue ambition over the medium term remains.

The majority of our USA revenues were generated by the Simply Be brand, which continues to resonate very well with customers. Performance of the JD Williams brand, which was launched in the USA in March 2016, has also been encouraging, N Brown added.

Ireland delivered revenues of 15.9 million pounds (20 million dollars), up 18.8 percent or 3.8 percent in constant currency terms. The operating profit was 3.3 million pounds (4.2 million dollars), an improvement on the 0.8 million pounds (1 million pounds) delivered last year.

Overall, revenue the company’s store estate was 23.1 million pounds compared to 27.3 million pounds (35 million dollars) last year. As at the end of FY17 N Brown had 23 stores open, split 15 dual Simply Be and Jacamo stores and eight High & Mighty stores. The operating loss of the store estate was 2 million pounds (2.5 million dollars) against 0.8 million pounds (1.03 million dollars) last year.

Highlights of the other major developments

In February, N Brown appointed Miriam Lahage as Figleaves CEO. Having previously worked at TJX, Net-A-Porter, eBay and Navabi, the company said, Lahage brings significant retail and online experience to the board. The company expects, new management team leveraging the benefits of the Demandware platform will improve the performance of Figleaves going forwards.

The company also announced that Richard Clark will be joining the company as International Director and will report into CEO Angela Spindler and lead the international expansion, both in the USA and in other geographies. Clark was most recently marketing and international director at Boohoo and brings with him significant multi-channel retailing and online marketing experience, having also spent time at The White Company, Argos and Best Buy Europe.

Picture:J D Williams website

N Brown