N Brown sales drop by 8.8 percent but recover over Q1
15 Jan 2021
Product revenue at N Brown Group plc continued to recover from the sudden and sharp decline experienced in the first quarter of FY’21 caused by the impact of Covid-19. Group revenue declined 8.8 percent compared to 21.9 percent drop in the first quarter. Within apparel, the company saw strong growth in leisurewear and nightwear offset by a decline in dresses, formalwear and swimwear. The company said, the five strategic brands delivered product revenue down by 1.4 percent.
Commenting on the update, Steve Johnson, N Brown’s Chief Executive, said in a statement: “We continue to move through the acceleration phase of our strategy; simplifying and strengthening our core brand proposition whilst improving our digital capabilities. We saw a continued recovery in product sales over the key Christmas period with particular strength in our Home & Gift proposition. We were pleased to recently complete our successful capital raise, which will help us continue the acceleration phase of our strategy and create a sustainable business delivering profitable growth over the long term.”
N Brown sees increased demand for Home & Gift category
During the period under review, the company experienced strong demand for computing, up 115 percent, gaming, up 50 percent and white goods, up 48 percent, and Home & Gift sales now comprise 42 percent of product revenue, compared to 32 percent in the same period last year.
On December 23, 2020, the group completed its 100 million pounds capital raising and move to AIM. The net proceeds of the capital raise combined with the on-going focus on cash generation, the company added, have allowed the group to repay all unsecured debt and in line with the targets laid out in November, the group now has a net cash position of 83.7 million pounds.
N Brown reveals FY’21 outlook
The company further said that as with a number of other retailers, it is currently experiencing delays of two to three weeks for many of the stock deliveries, given global container issues, as well as cost pressure in the supply chain.
Based on the current assumptions on the likely impact of Covid-19 on its operations, N Brown to offset more than 80 percent of the absolute gross margin decline, driven by the pandemic’s impact on sales and bad debt provisions, through operational cost savings, with bad debt provision movements being the main net driver negatively affecting EBITDA. As a result, the group currently expects to deliver FY’21 adjusted EBITDA of between 84 million pounds to 86 million pounds.
Picture:N Brown image gallery