N Brown takes £40m hit for ‘flawed’ insurance

Shares of Manchester-based fashion retailer N Brown Group fell almost 4% after it announced that it “identified flaws in certain general insurance products which were provided by a third party insurance underwriter and sold by the group to its customers between 2006 and 2014.”

N Brown brands include JD Williams, Simply Be and Jacamo.

N Brown Group said: “Following an assessment of the cost of potential customer redress, the group expects to incur an exceptional cost in this year’s income statement in the range of £35 million to £40 million.

“However, the group anticipates that there may be mitigating actions to reduce the overall net cost.

“The cashflow impact of this is forecast to occur from FY19 onward, and the group anticipates funding the full cost of customer redress from existing resources.”

The news followed a review prompted by a recent industry-wide request from the Financial Conduct Authority that firms ensure that general insurance products and add-ons offered value for their customers.

N Brown Group added: “The group confirms that this matter will not impact its underlying operations, nor the risk profile of the group’s current and future customer or debtor balances.  

“The group continues to demonstrate strong underlying trading performance in line with its 20 June 2017 trading statement.”