N Brown retains ‘confident outlook’

HOME shopping giant N Brown will tell its shareholders today that trading has slowed in the aftermath of the General Election.

The Manchester company will announce at its annual general meeting that it has seen total group revenue increase by 1.1% in the 18 weeks ended July 3 which is ahead 0.1% on a like-for-like basis.

This compares with a sales increase of 3.1 % in the eight weeks to April 24.

The company has also increased its market share in women’s clothing and footwear – despite a new report stating that demand among older and larger customers has generally fallen.

Chairman Lord Alliance of Manchester will also say that the company, which bought lingerie company Figleaves Trading for £11.5m last month, has witnessed the proportion of its sales transacted online grow to the extent that it now represents 41% of total revenues.

The company has also seen a boost in customers as a direct result of online search engines and advertisements in newspapers and magazines.

Lord Alliance said: “Trading since the general election has been subdued as customers assess the likely impact on their personal situation of the coalition government’s new policies.

“We have committed to increase the recruitment expenditure in the second half beyond the budgeted level to bolster the database.

“The actions we took in 2009 to reduce the ratio of bad debt to sales growth have reduced revenues by almost 2% compared with the same period last year.

“However these actions have also contributed to an improvement in the gross margin rate which is now only 0.2% below last year’s level, compared with an expected 0.3% decline at the announcement of our preliminary results.

“This gross margin reduction will be offset by operational cost savings, largely due to the increased level of online trading.

“The development plan for High & Mighty is progressing to schedule and we are excited by the opportunities for Figleaves, which we acquired last month, and for the imminent launch of the Simply Be website and catalogue in the USA this summer.

“These business developments build on our strategy of targeting niche customers and products and, together with the continuing strong financial position of the group, give the board confidence in the future outlook for the group.”