Offers drive sales but squeeze margins at N Brown

HOME shopping group N Brown has seen sales improve over the past 18 weeks but the company said it relied on more offers to drive growth which had squeezed margins.

In an interim management statement ahead of its annual meeting today the Manchester company said revenue increased by 5.1% in the period to July 2.

Like-for-like sales were up 1.6% after stripping out sales from online lingerie brand Figleaves which it acquired in June 2010.

“As we anticipated, and in line with the sector, we are having to be more aggressive with targeted promotional discounts to help drive revenue and this has led to a 0.2% decline in the rate of gross margin,” said the company.

Menswear and footwear grew “strongly” in contrast to a decline in demand for womens’ clothes. It said its more expensive ranges were still doing well but inflationary price increases on items in the company’s core ranges had subdued demand.
 
N Brown said Figleaves and High & Mighty are both delivering improved financial results. International sales for Simply Be in Germany and the US are rising in line with expectations and two retail sites in the North West have been acquired to trial the multi-channel home shopping retail concept. They should be open in early October.
 
Online sales now account for 47% of total revenue, up from 41% last year.