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N Brown Group cuts store numbers as traffic moves online and to mobile

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N Brown Group , which four years ago helped to pioneer opening stores for online brands, said today that it plans to close up to a third of its shops in the face of weak footfall and rising business rates.

The home shopping group said in a first quarter trading statement that it would close up to five loss-making Jacamo and Simply Be co-branded stores, a move that leaves 10 stores in operation.

The five stores contributed £5m revenue over the last full financial year but accounted for all of the £2m operating loss made by its stores in that period, N Brown Group said. It said that weak high street footfall and future significant business rate rises were both factors in the decision.

“As a result of ongoing weak footfall in some locations, and with a clear focus on driving financial returns across all areas of our business, we will be closing up to five loss-making stores,” said chief executive Angela Spindler.

“Although the outlook for consumer confidence remains uncertain, our offering is resonating with customers. At this early stage in the financial year, trading is on track to meet our expectations. We continue to invest in our customer proposition and remain very confident in our future growth prospects.”

When the store chain was first mooted, back in 2013, the group envisaged a national chain of 25 stores that would build on its roots in catalogue and, latterly, online selling. It was anticipated that the stores would provide a halo effect, attracting shoppers to buy online as well as in the branches. But now it seems that online has become the primary draw in itself: some 78% of all new customers now buy online.

Online traffic grew by 34% in the 13 weeks to June 3 and online sales by 16%. Almost three-quarters (71%) of all revenue is now generated online, up by four percentage points from last year. Online traffic is increasingly arriving via mobile devices: smartphones accounted for 51% of all sessions in the quarter, up from 42% a year ago, while mobile devices as a whole accounted for 74% (+ five percentage points). As mobile traffic increased, the conversion rate fell slightly.

Overall, group revenue grew by 5.6%, with JD Williams sales up by 12.7% and Simply Be by 20.5%.

Behind the scenes, the retailer is upgrading its web platform and says its new High and Mighty site will soon go live, with all brands on track to be replatformed by the end of summer 2018.

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