N Brown Group reports fourth-quarter rise in sales, but warns on full-year profits
N Brown Group today warned on full-year profits - but said that was down to steps that were a necessary part of building a "better business for an online world".
The home shopping group, which operates brands from Jacamo and Simply Be to Figleaves , today revealed a 3.6% rise in sales in the fourth quarter of its financial year as it invested in a 'first price right price', and one price for all sizes approach. During the 13 weeks to February 28, the business recovered from a "challenging" autumn.
But, said N Brown Group, full-year sales were flat, with profits expected to be "slightly below" previous estimates of around £88m. Financial services revenue, from those customers who buy on credit, was a "headwind, driven by measures to further improve the quality of our debtor book."
"We are very encouraged by the momentum seen during the fourth quarter, both in terms of trading and strategic progress. Combined with our continued product improvements, during the period we decided to invest more in price; this proved successful, with product volumes returning to double-digit positive growth for the first time in many years," said chief executive Angela Spindler.
She added: "Whilst we are disappointed by the slower than anticipated progress from a profit perspective, this is because we are taking the right decisions now - in some areas earlier than anticipated by our previous profit guidance - in order to build a better business for an online world."
In all, 62% of its sales took place online in the 13 weeks to February 28, up from 59% at the same time last year.
The company is continuing to invest in a systems transformation plan and will extend its warehouse ahead of further growth. N Brown Group said it expected to spend between £50m and £60m on capital expenditure in the 2015/16 full-year.
"We have also accelerated our strategic transformation programme and commenced a major extension of our warehouse to support our future growth," said Spindler. "The transformation we are driving is fundamental and necessary for future long-term sustainable growth."