Clothing and online retailer takes series of measures following plunge in sales
Clothing and online retailer N Brown is putting a series of measures in place to deal with the impact of the coronavirus crisis.
The Manchester based business said in a market update it had seen a dramatic slump in demand over the last week.
As a result it is putting a series of measures into place to keep damage to a minimum.
Trading for the first two weeks of the new financial year was in line with expectations.
However, during the last week the firm has seen a very significant and sudden reduction in customer demand with daily product sales down by more than 40%.
The company is anticipating a material reduction in demand through the year.
The company has taken a number of immediate and proactive measures to reduce costs and preserve liquidity, including:
• A significant reduction in marketing expenditure with immediate effect and for the foreseeable future if market conditions do not improve;
• Stopping and deferring all non-essential capital expenditure. This will have little or no impact on the short-term performance of the business;
• Working collaboratively with HMRC to secure the deferral of all tax and national insurance payments;
• Stopping stock purchases immediately, thereby aligning stock levels for SS20 with reduced customer demand. Going forward, we will be re-evaluating our stock intake plans; and
• Freezing all recruitment and reviewing organisational structures.
The group is also exploring all options in relation to the Government and Bank of England support packages for business.
The firm said it is expecting to have to adjust its loan facilities to deal with the crisis.
The group is in talks with its long-standing, supportive lenders and is exploring options in relation to maximising the value of its significant unlevered debtor book.
The firm is also exploring options in relation to its unencumbered freehold properties with an original cost of £58.3m.
As a result of the impact of Covid-19 the board will not be recommending a final dividend for the financial year ended 29 February 2020 and will suspend dividend payments for the foreseeable future.
The board had expected to release its full year results for the year on 29 April 2020. However, due to working restrictions affecting both the company and the auditors, there is likely to be a delay to the publication of the results.