N Brown full year profits fall 29%

N Brown FY profits fall 29%
N Brown said trading had “continued to improve” after the government’s lockdown against coronavirus.
// Profits down by almost a third for N Brown’s 2020 financial year
// The Jacamo, JD Williams and Simply Be retailer is now focused on “refreshed strategy” for growth
// In light of coronavirus lockdown, CEO says “the crisis will cast a lasting shadow over the sector”

N Brown’s annual profits fell 28.9 per cent in the 52 weeks to February 29, during what the group described as a “critical year” in its transition to digital channels.

The Simply Be, Jacamo and JD Williams owner saw group revenue fell 6.1 per cent to £858.2 million in the year, during which the retailer looked to switch its emphasis to online sales.

READ MORE: N Brown sales decline as it secures £50m with lenders

In the 52 weeks to the end of February, 85 per cent of its product revenue was generated through digital channels, up 6 per cent from the year before.

Across its brands, 98 per cent of Simply Be revenues were digital, 97 per cent of Jacamo’s, 81 per cent at JD Williams and 60 per cent at Ambrose Wilson.

Revenue from financial services fell 2.7 per cent for the year, although N Brown noted that industry-wide regulatory actions had affected its performance.

Looking ahead to its current financial year, N Brown said trading had “continued to improve” after the government’s lockdown against coronavirus was implemented in March.

Group revenue fell 22 per cent in the first quarter for the 2021 year, with product sales down 28.8 per cent, but improving to a loss of 21 per cent in the most recent three weeks.

Financial services revenue also fell 8.2 per cent, although cash collections remain in line with its previous year.

“The crisis will cast a lasting shadow over the sector, but we are confident that our agile approach and attractive brand offerings, with clear target customer segments, position us well to navigate the issues and emerge as a stronger business,” said chief executive Steve Johnson.

“In a year of restructuring for the Group, Simply Be, JD Williams, Jacamo and Ambrose Wilson all grew digital revenue and following further progress in the first quarter of this financial year, 91% of our product revenue 3 now comes from digital channels. The retail environment remains heavily promotional and the regulatory challenges in financial services have required us to adapt and evolve our offer, but our commitment to driving operating efficiencies is creating the right platform for the future,” Johnson added.

Last month the retailer announced it had secured new financing arrangements with lenders, including a £50 million facility provided under the government’s Coronavirus Large Business Interruption Scheme.

On Thursday, N Brown revealed the details of its refreshed growth strategy for the future, including developing distinct brands to attract a broader range of customers, a new Home offering, flexible credit for customers and improving the digital experience for its shoppers.

“As we move forward, we have refreshed our strategy, evolved our key pillars of growth and are pushing on with further work to streamline our brand portfolio, improve our product, create a brand new Home proposition whilst improving our digital capabilities and developing our financial services offer,” said Johnson.

Challenges remain in the year ahead, but we are focused on accelerating the business and are confident we are taking the right actions to create a sustainable, profitable business for the long term which has the potential to generate significant value,” Johnson added.

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