N Brown revenue slips in ‘challenging environment’

Manchester-based online fashion and home goods retailer N Brown Group on Thursday published an update on trading for the 13 weeks ended May 28, 2022, showing revenue slipped 2.1% to £165.1 million.

N Brown’s five core brands are Simply Be, Jacamo, JD Williams, Ambrose Wilson and Home Essentials.

N Brown said: “The trading environment has been challenging since the start of FY23, with inflation impacting consumer confidence, resulting in softer volumes and revenue than anticipated at the start of the year.

“We have grown our share of the online market during the quarter.

“Our improved product is resonating with customers including strong sell through rates on JD Williams’ recently launched in-house designed own brand range, Anise, and growth in demand for Jacamo’s tailoring products.

“We have experienced further normalisation in the mix towards Clothing & Footwear, which represented 71% of product revenue (FY22: 66%), with strong performances in categories including formalwear and occasionwear, alongside mix-driven higher return rates.

“The previously reported softer conditions in the online home market have continued into FY23, and we expect this to continue.

“Financial Services revenue has declined at a similar level to FY22. We have seen a greater level of interest from customers in our credit product during the period as well as further normalisation of arrears rates.”

In its full-year outlook, N Brown said: “Our earnings expectations for FY23 remain unchanged from those outlined in our Preliminary Results on 18 May 2022, with Adjusted EBITDA expected to remain at a level similar to that reported in FY21.

“The group remains mindful of the high level of economic uncertainty and the ongoing impact of this on consumer activity and operating costs.

“However, these dynamics are being actively managed, and the group will update on trading at the time of its Interim Results in October.

The board remains confident that over the medium term our strategy will support the delivery of 7% product revenue growth with a 13% EBITDA margin.

N Brown CEO Steve Johnson said: Sales volumes since the start of the financial year have been softer, reflecting various well-documented pressures on consumer confidence, which are showing no signs of abating in the short term.

“As these pressures persist, we expect the trading environment to remain challenging and will, therefore, continue to take actions to mitigate the effects wherever possible.

“Despite this uncertain backdrop, our FY23 Adjusted EBITDA expectations remain in line with previous guidance, as we balance cost control and our variable cost base with investments in our technology, our people and in our strategic brands.

“The board remains confident in the group’s strategy and achieving its medium-term objective of delivering sustainable profitable growth.”

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