Online sales grow by 12% at N Brown group
Ecommerce helped to push up sales at N Brown Group
, the home shopping company said in first half results out today.
The company reported “explosive growth” in the use of mobile devices to surf its sites during the first half of its financial year, but said that it would evaluate progress at its recently opened Simply Be stores after Christmas, after they turned in first-half losses of £1.1m.
Internet sales rose by 12% to £196m at the group, whose brands including Simply Be
, and now account for 53% of home shopping revenue, up from 48% at the same time last year. That helped to take total sales for the six months to September 1 to £379.3m, a rise of 4.3% on last year. Like-for-like sales were up by 3.7%. Pre-tax profits, however, fell by 6.7% to £41.8m from £44.8m at the same time last year.
“We have invested heavily in our online systems in recent years,” said chief executive Alan White, “and we are now able to exploit that advanced functionality to drive incremental sales from both new and existing customers. For example, revenue from products sold only on the internet, the vast majority of which are despatched directly to customers from our suppliers, rose by 57%.”
The company also said that customers ordering online continued to spend more and incur lower transactional costs. Meanwhile it continues to optimise its web platform for m-commerce after seeing “explosive growth” in the number of visitors accessing sites from mobile devices. In all, it said, 18% of online sessions now originate from such devices.
Online sales were boosted by its expansion of the Simply Be brand into stores – but as yet the stores have been loss-making. There are now six Simply Be stores, and a seventh is due to open in Manchester’s Arndale Centre this month. In the first half of the year, sales from the stores came to £1.7m, while losses hit £1.1m. “We will evaluate the results of the stores in early 2013 once we have traded through the Christmas period,” said White. “However we can already see an uplift in online sales in postcodes near a store and the joint Simply Be/Jacamo store format looks promising.”
Across the brands, N Brown Group said the greatest growth came from those aimed at under-50s. Together its younger brands saw sales increase by 12% to £143m. Menswear brand Jacamo was its fastest growing, with sales up by 40%. Sales from brands targeted at over 50s were level with the first half of last year, at £236m.
Sales in the US market rose by 53% to £3.4m, it said, but the group plans to change its German business model to achieve a “smaller but profitable” business following “unacceptable” levels of returns.
White said the upward trend in sales had continued past the first half of the year. In the six weeks to October 13 they were up by 10.1%, or 9.4% on a like-for-like basis, compared with last year.
“Everyone in the business has worked very hard once again to manage our core home shopping business during the prolonged recession whilst at the same time investing time and energy to work on projects to deliver growth in the future,” said White.