N Brown shares fall 20% as it cuts dividend

Shares of Manchester-based fashion retailer N Brown Group fell more than 20% on Thursday after it said its first-half revenue rose 1% to £457.8 million but that it would cut its interim dividend in half “to a more sustainable level” amid disappointment at the firm’s performance.

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

Last month, N Brown said CEO Angela Spindler would leave her role at the end of September and that its financial services boss Steve Johnson would assume the role of interim group chief executive officer until a new chief executive was in place.

Johnson said: “The group’s adjusted profit was in line with our expectations as we benefited from growth in our online Power Brands and Financial Services, along with improved marketing efficiency.

“We were however disappointed with our wider product performance which was impacted by the ongoing decline of our legacy offline business and challenging market conditions.

“Going forward we expect offline sales to continue to fall as we focus on online Power Brand growth.

“While this will hold back revenue in the short term, there are opportunities to drive profit particularly through improved efficiency, as the business further shifts online, and we accelerate the use of analytics to increase returns on our promotional spend.”

N Brown  chairman Matt Davies said: “Whereas much progress has been made transforming the business into an online retailer, we have not yet achieved the growth in product or international that we would have hoped for and have decided to rebase the dividend to a more sustainable level from which we will seek to grow.

“We are now in the process of searching for a new chief executive to take the group forward through the next phase of its development.

“In the meantime, we are pleased that Steve Johnson will lead the business. We have a strong base on which to build.

“Over three-quarters of our product revenue is now online and we have industry leading expertise in fashion that fits.

“This is supported by a strong financial services business. Our goal of becoming a world class digital retailer remains unchanged.”