N Brown Group reports falling profits after 'disruptive' year of digital modernisation
Simply Be, Jacamo and Figleaves-owner the N Brown Group today reported flat sales and falling profits following a "more disruptive than anticipated" year of modernisation towards a digital-first mindset.
The home shopping company reported group revenues of £818.0m in the year to February 28
, slightly down from the £818.9m reported in the previous year. Pre-tax profits of £76.3m were 21.2% lower than at the same time last year. But the proportion of online sales grew, accounting for 59% of all sales over the full year, and 62% in the final quarter. Mobile devices accounted for more than half of all online traffic.
The company said weak autumn trading had hit profits, but that it was confident about the future. A recent relaunch of its JD Williams business was "on track" with new customer orders growing in double digits.
In the year, the cost of its global multichannel transformation came to £41m, while the benefits were valued at £24m. The company expects that figure to start improving from 2017 once tools including cloud-hosted technology, a new international web platform, personalisation, a real-time single customer view and a new customer contact centre system are in place.
The company is also building its previously online-only Simply Be and Jacamo brands into a chain of 25 stores. So far it has 15 stores, including five opened during the year. Today it said sales from the store had grown by 64% to £13m, while operating losses widened from £1.6m to £1.8m which, said the company, "we view as a strong performance against the backdrop of a significant store opening programme."
Chief executive Angela Spindler said the last year had been an important one for the company. "We are comprehensively modernising the business in terms of organisation, capability, infrastructure and processes to adopt a digital-first mindset and to ensure that we are fit for the future of retail," she said. "We are improving our product proposition and competitive position by investing in quality and price. We have also re-phased our seasonal product and marketing to better reflect consumer spending patterns and to bring the business into line with a modern clothing retail model.
"Step-changing the way the business operates and goes to market in some key areas proved more disruptive than anticipated and this, combined with a weak Autumn trading period across the sector, led to a profit performance below expectations. We are, however, improving the sustainability of future profit growth and look to the year ahead with confidence."