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RetailX Brand Index 2019

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N Brown: 80% sales online in year of offline ‘managed decline’, with 20 store closures

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Jacamo sales were almost all online last year
Jacamo sales were almost all online last year
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N Brown: 80% sales online in year of offline ‘managed decline’, including closure of 20 stores

N Brown says that 80% of its sales, worth around £500m, were made online during a year in which it ended its experimental move from online brand to stores, closing all 20 of the Simply Be and Jacamo shops that were open a year earlier. The group’s focus is now firmly online and on a customer-centric strategy, while it managing the decline of its offline business. This week it said, reporting full-year figures, that 93% of sales were made online at its ‘power’ Simply Be and Jacamo brands during the year to March 2, while its largest brand, JD Williams, made 76% of its sales online.

 

Digital revenues at those brands grew during the year, with JD Williams up by 8.8%, Simply Be up by 8.7%, and Jacamo up by 5.1%. Across N Brown brands, 80% (+7 percentage points(pp)) of sales were made online, with 91% (+1pp) of new customers buying via digital. But conversion rates fell from 5.3% to 4.9%, perhaps as the rate of traffic from mobile devices grew to 78% from 76% a year earlier.

 

Overall, revenues fell at JD Williams (-2.4%) although it remained the group’s largest brand with sales of £159.5m. The trend was also downwards across its secondary (-4.6%) and traditional (-17.2%) brands. N Brown Group said that JD Williams’ figures included a ‘drag’ from shoppers that it migrated from a legacy offline brand, Fifty Plus.

 

Sales at Simply Be rose by 4.4% to £131.5m, and at Jacamo by 3.9% to £64m.

 

Group revenue of £914.4m in the year to March 2 was down by 0.8% compared to the previous year. At the top line, earnings before interest, tax and asset write-downs grew by 7.9% to £128m, but one-off costs that the retailer said related mostly to legacy issues, meant there was a bottom line pre-tax loss of £57.5m, a fall of 454.3% from a profit of £16.2m in the previous year.

 

Chief executive Steve Johnson said it was pleased with its figures for the year, which he said was one of “marked acceleration in the business’s transition as we continue to target profitable, digital growth by focusing on our digital customers and managing the decline of our offline business.”

 

He said: “A re-focusing of our strategy on delighting our customers is now required. We will initially focus on our core UK market, simplifying our approach to ensure our brand and product proposition continues to improve and resonate with customers. We will also look to harness data and technology to offer customers more choice and flexibility when shopping with us.

 

“All of this aims to return N Brown to sustainable profit growth, through a digital, retail-led, customer-centric strategy and at this stage in the new financial year our overall expectations are unchanged. We look forward to the future with confidence.”

 

JD Williams is ranked Leading in IRUK Top500 research, while Simply Be and Jacamo are Top50.

 

At home and abroad

The retailer pointed to figures that suggest the UK online clothing and footwear market would grow by 7% a year for the next five years, giving it plenty of room to grow from its current online share of 4% and 3.2% respectively in those markets. Internationally, N Brown said it had closed its US business, although it would continue to service US Simply Be clients. In future it would explore international markets through “selected, targeted partnerships”, a decision that does not affect its its Irish business Oxendales, which “continues to perform well”.

 

Simplifying the business to improve the customer experience

The business is to focus on womenswear, and menswear and the customer experience will be improved through steps such as the recent move to an improved mobile web experience that it says bridges the gap between desktop and mobile functionality. A simplified account registration process “has reduced drop out by a substantive degree”. Other recent improvements include a new in-house photo study equipped with Hyphen Interactive Live Photo technology. Investment in its supply chain will include a new returns automation facility at its Shaw, near Oldham, Lancashire, distribution centre.

 

Data and artificial intelligence

N Brown Group aims to trade smarter using data to make operations more efficient, and by targeting customers through better insight. It is working with third-party analytics providers and using a test-and-learn culture to improve the use of both analytics and data. Customer discount codes will be targeted while the retailer aims to also improve its promotional planning.

 

“Through a mix of tactical quick wins and longer-term initiatives, we will enhance personalisation and use data to optimise fit for our customers to ensure we create the right product for them,” it said. “We have used Artificial Intelligence modelling, which predicts size profiles and return rates, along with the effectiveness of product attribution and image data in predication. Early results from this have been successful and will be further developed in this financial year.”

 

Products

Clothing is set to be improved through the use of body scanning technology and 3D design and product development. “In addition, we will continue to evolve from design influenced by seasonal trends to key product ’shouts’ dropped cohesively in three weekly cycles and thus allow substantially reduced lead times,” it said. “Our experience of recent peak trading periods gives us confidence in our ability to buy more promotional product to complement our core ranges and maintain a freshness in our offering.”

 

Image courtesy of N Brown Group

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