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N Brown Group sales up but margins squeezed

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Internet and catalogue home shopping retail business N Brown Group saw like-for-like sales increase two per cent in the 19 weeks to January 7th 2012, according to an interim management statement published today.

Like many UK retailers, the company undertook additional promotional activity throughout the autumn in order to boost trading, and today’s announcement indicates that this is expected to result in an annual one per cent drop in gross margin for its full year.

Total group revenue increased by 2.3 per cent during the period in question, with trading flat in October and November followed by a pick-up in December sales as Christmas approached. Online sales were up nine per cent.

Last year saw the opening of N Brown’s first two Simply Be concept stores, and following their initial success the business has committed to five more of these outlets, selling plus-size clothing for women, in 2012.

Having launched Simply Be in the US in 2010, the group’s international division is performing well, although the business has pulled back some of its recruitment activity in Germany to focus on reducing the returns rate.

N Brown said: “The board believes we can deliver performance in line with our expectations for the year ending March 3rd 2012, subject to a reasonable reaction from our customers to the new spring catalogues which are being despatched in January and February.

“Looking further into 2012 we do not expect life to be easy for our customers but the expected reduction in the rate of inflation, especially for clothing and footwear, should help to prevent the financial pressure on them rising further.

“We will continue to drive for growth in our core UK home shopping business, particularly through the online channel, as well as focusing on our strategic opportunities in multichannel stores and international markets.”

Manchester-based N Brown owns a wide range of brands, including online lingerie specialist Figleaves.com and plus-size men’s clothing retailer High & Mighty.

Published on Wednesday 11 January by Editorial Assistant

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