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N Brown Group sales down by a quarter in the last six weeks

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N Brown Group sales down by a quarter in the last six weeks

Online and catalogue retailer N Brown says its sales have fallen by a quarter over the last six weeks, although its trading has improved from levels experienced in early March.

 

The retail group, whose brands include Simply Be, Jacamo and JD Williams, said product sales had fallen by 25% over the last since the last week of March. Home and gift sales were up by 74% and clothing sales were 48% down. “Within apparel,” it said, “offline sales declined significantly more than digital sales.”

 

The business has furloughed 30% of staff and reduced marketing spend by 80% while also freezing recruitment. Its distribution centres have been reorganised around safe social distancing, in consultation with trade union Usdaw. N Brown has reorganised its ordering, paying suppliers according to contracts but cancelling orders due for this summer in the light of uncertain demand. It has put in place new three-year lending worth up to £50m under the government’s coronavirus large business interruption loan scheme.

 

Steve Johnson, N Brown chief executive, said: “In what remains a very uncertain environment, we have been balancing our number one priority of looking after our colleagues, with a commitment to continue serving our loyal customers, whilst ensuring the business has the resilience to navigate the various challenges we are facing.

 

"Our colleagues and suppliers have shown fantastic dedication and demonstrated real agility amidst difficult conditions, and I am extremely grateful for their hard work.

 

"We are pleased to have secured support from both our banking partners and the government’s loan scheme, which help to strengthen our financial position and gives us the flexibility and certainty to manage through this challenging period. In addition, the immediate and substantive actions we took at the very outset of this crisis have supported our working capital positively in this period. We have a unique portfolio of brands and products which appeal to a range of customer groups who can also benefit from our flexible payment options. As we further develop and improve our offer, we remain confident in the long-term prospects for the business as we emerge from these challenging times.”

 

Sofie Willmott, lead analyst at data and analytics company GlobalData, said: “Despite N Brown’s performance improving in the last six weeks compared to when the UK lockdown initially caused sales to plummet, the retailer has struggled to capitalise on demand shifting online. Other retailers have reported much stronger online uplifts and although N Brown has benefitted from selling products other than clothing and footwear (including electricals, toys and bikes), these categories account for a smaller proportion of its stock and have not been enough to prop up total sales.

 

“N Brown’s product range, across its brands, is dominated by clothing and footwear which is set to be the hardest hit sector by Covid-19 with online spend forecast to decline 9.5% this year. Although many multichannel clothing and footwear retailers are seeing spend transfer online while their stores are closed, N Brown does not have stores and therefore has not experienced an online boost from this channel shift. 42.6% of UK consumers have spent more online as a result of the pandemic (according to GlobalData’s survey conducted in early May) so N Brown should have been able to capture some of the additional traffic and spend available digitally, however it appears to have missed out as its better-known competitors have been shoppers’ first port of call. Lower brand awareness has put N Brown at a disadvantage and with its marketing expenditure being slashed by 80% this year, it is unlikely to acquire a significant number of new customers, relying on its existing shopper base to hold up sales.”

 

She said the new lending would give N Brown breathing room in 2020.

 

Jacamo and Simply Be are Top100 retailers in RXUK Top500 research.

 

Image: courtesy of N Brown Group

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