N Brown continues digital strategy with Amazon partnership despite loss
The plus-size retailer will start selling select ranges through Namshi and Debenhams.
Plus-size retailer N Brown has clinched a partnership with Amazon Fashion as it charges on with digital turnaround plans, despite booking a first-half loss.
The company reported a 5.6% jump in group revenue to £453.4 million in the 26 weeks to September 2, helped by a 14% rise in online revenues.
Digital sales accounted for 72% of revenue during the first half of the financial year, while 76% of online traffic came from mobile shopping.
N Brown also cheered “significant” share gains in ladieswear, with its Simply Be brand alone experiencing double digital revenue growth.
Today we announced our 1H financial results. Group Revenue +5.6%, Ladieswear +9.5%, Menswear +5.9%. Full details: https://t.co/BiUVuvMx3w— N Brown Group PR (@NBrownPress) October 12, 2017
But it was not enough to save the company from the effects of the Brexit-hit pound, which pushed it to a loss of £27.6 million compared with a profit of £21.1 million during the same period a year earlier.
It was also impacted by exceptional costs of £54.9 million linked to store closures, tax matters and redress for customers after the company found a flaw in certain insurance products it sold to customers between 2006 and 2014.
Chief executive Angela Spindler said: “I am very pleased to report continued good trading in the half, with Simply Be the standout performer, recording 21% growth.
“We made significant ladieswear market share gains against what remains a subdued consumer backdrop.
“In line with other retailers, FX rates represent a headwind and this was particularly felt this half.”
It has not stopped the company charging ahead with a digital strategy, as it unveiled a string of new online partnerships.
N Brown said capsule collections for its Simply Be brand will now be sold through Namshi, while its Jacamo range will be sold through Debenhams, and both lines will be made available on the Amazon Fashion platform.
Ms Spindler said: “Our transformation into a flexible, online retailer continues to benefit all aspects of our business and we are today sharing our three growth levers going forwards.
“These are continuing to gain share in the UK, growing internationally and working in partnership with other companies to offer even more choice to our customers.”
But investors appeared more pessimistic, with shares down 3.6% or 12.6p at 337.4p in afternoon trading.
John Stevenson, an analyst at Peel Hunt, said: “It’s been a fairly torrid time for N Brown, with profits down circa 20% since launching the initial revitalisation programme.
“While the level of investment and change required was greater than expected, it’s now time to show that the benefits can be delivered.”
The chief executive assured that trading was “on track” as the second half of the financial year kicked off.
“We are focused and well prepared for the peak trading period ahead. We are confident in our ability to deliver sustainable long-term growth and achieve our international ambitions,” Ms Spindler said.