N Brown Group today says the Covid-19 pandemic has accelerated its shift towards digital retailing, and that moving into homewares helped it to improve its sales during the first half of its financial year. Now it plans to raise £100m in equity from investors to invest in digital.
The group, whose brands include Simply Be and Jacamo, today reported sales of £356.7m in the 26 weeks to August 29 – that’s 17.6% down on the same time last year. Pre-tax profits of £14.1m were 25% down from £18.8% last time. In the first quarter of the year alone, revenue from product sales fell by 28.8%, and that improved to a fall of 12% in the second quarter allowing the launch of its Home Essentials range. Home and gift sales grew by 25.4% in the first half, as demand increased.
The launch of the range has helped the group, which previously focused on fashion – an area where sales have fallen during the Covid-19 pandemic and lockdowns.
N Brown Group chief executive Steve Johnson said the retailer had seen product sales improve since the initial impact of the pandemic, thanks to the rise in home and gift sales.
He said: “Having restructured the business and transitioned to more than 90% of revenues from digital, we now see a clear opportunity to capitalise on various industry drivers, not least the increasing trend towards online retail, and further improve our customer proposition. Today’s separately announced proposed capital raise will give us the firepower to invest further in our digital capabilities and accelerate our growth strategy, whilst significantly strengthening the group’s balance sheet to provide us with ongoing flexibility and a strong platform from which to deliver attractive returns for all of our shareholders.”
The group’s strategy is now to improve its digital experience and use distinct brands and improved products in order to attract a broader range of customers. During the first half of the year the group focused on developing a new website front end and says it is taking a more agile approach to upgrading its technology. It has redeveloped the customer experience, with investment in search, navigation, product listings and details, shopping bag and checkout functions. It is also working with Bloomreach to use machine learning AI to personalise shoppers’ experience, including offering personalised products that fit their preferences. Digital sales currently account for 92% of group sales.
N Brown has simplified a wider range of brands to five: womenswear brands Simply Be, JD Williams and Ambrose Wilson, menswear brand Jacamo and the new Home Essentials brand. Simply Be and Jacamo are ranked Top100 in RXUK Top500 research, while JD Williams is Top50.
The retailer says it has been able to continue its service to customers throughout the Covid-19 pandemic, while keeping staff safe in distribution centres through the addition of social distancing, one way routes and and extra entrances and exits, while furloughing more than 500 staff from April.
