N Brown sales growth continues
HOME shopping group N Brown said today it was continuing to grow sales despite a more cautious approach, which had helped it reduce bad debt rates.
The Manchester company, which operates brands such as JD Williams and Simply Be, and specialises in larger sized clothing, said sales in the 18 weeks to last Saturday were up 5.1%.
Chief executive Alan White told TheBusinessDesk: “We are very much where we expected to be – we took a more cautious approach to customer recruitment because of the wider economic outlook and have also been keeping an eye on extending credit to our customers too.”
He said his biggest concern was over predictions for further rises in unemployment, which would dent consumer confidence.
“It’s the key thing for me – because it has a big knock-on effect with people worrying ‘Am I next?’, but I am slightly encouraged by reduced forecasts from the CBI.”
He said the company’s new German website had made an “encouraging” start – “It’s almost exactly in line with our plans – some products have done better, others not so well.”
Chairman Lord Alliance said sales have been driven by the improved targeting and quality of the catalogues and the recent warmer weather has benefited the demand for summer clothing and footwear.
N Brown said further investment in the brand websites was continuing to pay off, and had resulted in a 25% increase in online sales, which now represent 37% of the total.
On the issue of debt, Lord Alliance said: “Due to the material uncertainties within the economy, we budgeted to be more cautious in customer recruitment, the provision of credit facilities and cost control.
“While this has constrained our sales growth slightly, it has also led to a slowing in the rate of debtors growth, which is currently 8% compared with 13% at the year end, improving our cash flow position significantly relative to last year.”
He said the expected increase in bad debts had hit gross margins by 1.5%, but this had been “fully offset” by operational cost savings and reduced interest charges.
N Brown will publish its half-year figures in October. Market forecasts for the full-year expect profits to come in between £87m and £88m.
