Simply Be and Jacamo owner N Brown Group says trading has been challenging in the opening months of its financial year, with shoppers buying less than expected as inflation hits confidence. There is no sign, says its chief executive, of that improving in the short term.
The home shopping group says shoppers spent less in the first quarter of its financial year, but that its share of the online clothing market grew.
Shopping patterns, says N Brown, continue to return to normal as customers buy clothing including formalwear, occasionwear and from its new JD Williams Anise sustainable clothing brand online. At the same time, demand for homewares has softened compared to last year. Clothing and footwear accounted for 71% of sales in the 13 weeks to May 28 2022. A year earlier, in a quarter that included the final weeks of the third UK lockdown, clothing and footwear accounted for 66% of sales.
N Brown Group chief executive Steve Johnson says: “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.”
Group revenue of £165.1m fell by 2.1% in the first quarter of N Brown’s financial year, compared to the same time last year. Product revenue of £106.3m was 0.6% down on last time. Within that, sales of its strategic brands – Simply Be, JD Williams and Jacamo – rose by 2.5% to £75.2m in the 13 weeks to May 28 2022 , while sales of its managed decline heritage brands – which now also include its Covid-19 inspired Home Essentials brand and Ambrose Wilson – fell by 7.2% to £31.1m.
Revenue from its credit business fell by 4.8% to £58.8m. The retail group says it is now seeing a greater level of interest in its credit products but that arrears rates are returning to normal levels.
N Brown Group says it is holding cash of £30.8m and still has the ability to borrow £179.1m if needed.
Looking ahead, the group says it still expects its full-year revenue and earnings to meet previous expectations and that our the medium term it expects product sales to rise by 7% and to make a 13% profit margin.
“Despite this uncertain backdrop, our FY23 adjusted EBITDA [earnings before one-off costs] 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,” says Johnson. “The board remains confident in the group’s strategy and achieving its medium‐term objective of delivering sustainable profitable growth.”
Simply Be is ranked Top100 in RXUK Top500 research, while JD Williams and Jacamo are both Top150.