Jacamo and Simply Be owner N Brown Group today says sales are recovering for its key brands after Covid-19 knocked its core clothing market off course last year. The home shopping group has benefited from a pivot towards selling homewares and gifts, which now account for 42% of its sales – with computing (+115%), gaming (+50%) and white goods (+48%) all up sharply in the latest quarter of its financial year. It has raised £100m on the stockmarket to pay off unsecured debt and invest in further digitisation in order to grow sales.
The update comes as N Brown today reported third quarter sales 8.8% down on the same period last year. Overall product revenue was 8.9% down on last time, although at its five strategic brands – JD Williams, Simply Be, Ambrose Wilson, Jacamo and Home Essentials – sales were 1.4% lower than a year earlier. Sales at its other brands – including Figleaves, High & Mighty, House of Bath and Marisota – were 26.1% down. Homeware and gift sales stand at 42% of group sales, up from 32% a year earlier, while sales of nightwear and loungewear have improved but sales of more formal clothing such as workwear are down.
While group sales are still behind last year, the trend is improving from the first (-21.9%) and second (-13.4%) quarters of the year. N Brown’s experience follows the wider trend mapped by etail trade association IMRG that has seen clothing sales grow by only 1.3% during 2020, with online sales 9% up at multichannel retailers as a result of store closures, but down by 8% at pureplays. Sales of homewares, meanwhile, rose by 74% and gift sales by 32%.
N Brown Group chief executive Steve Johnson says: “We continue to move through the acceleration phase of our strategy; simplifying and strengthening our core brand proposition whilst improving our digital capabilities. This is generating continued momentum within the business, despite the difficult macroeconomic backdrop. We saw a continued recovery in product sales over the key Christmas period with particular strength in our home and gift proposition.
“We were pleased to recently complete our successful capital raise, which will help us continue the acceleration phase of our strategy and create a sustainable business delivering profitable growth over the long term. We remain mindful of the ongoing uncertainty in the UK retail environment, but as a digital business we look forward to building on the unique strength of the group’s brands in 2021 and beyond.”
The retail group raised £100m on the stockmarket before Christmas in order to pay off all unsecured debt and to invest further in its digital capabilities as it looks to grow the business. It now has net cash of £83.7m available, alongside net debt that is expected to stand at between £285m and £305m at the end of its current financial year.
Falling sales and bad-debt provisions will hit profitability at the group, but N Brown says it plans to offset at least 80% of the impact through cost savings in its operations. As a result, full-year earnings are expected to come in at between £84m and £86m, although one-off costs - driven by restructuring – are expected to come in at about £10m.
N Brown also says it is still suffering from delays of two to three weeks in stock being delivered as a result of the continuing global shortage of containers.
JD Williams is ranked Top50 in RXUK Top500 research, while Simply Be and Jacamo are both ranked Top100.