Online retailer announces return to profit

Steve Johnson

N Brown, the Manchester-based online retailer, has returned to profit, despite a fall in revenues in the year to February 29.

Sales fell from £647.2m to £594.9m.

However, last year’s pre-tax loss of £57.5m was transformed into a pre-tax profit of £35.7m for 2020.

The 2019 profit figures were impacted by an exceptional charge of £145.6m, while this year’s figures contained exeptional items worth £28.5m.

The group, which includes the JD Williams, Simply Be and Jacamo brands, said 85% of fiscal year 2020 product revenue was generated through digital channels, an increase of six percentage points.

It said 98% of Simply Be revenues were digital, Jacamo was 97%, and JD Williams 81%.

In the first quarter of the current financial year, N Brown said trading has continued to improve from the sudden and significant decline experienced in March, due to the coronavirus pandemic.

Group revenue was down 22%, product sales were down 28.8%, but over the past three weeks was down 21%, financial services revenue was down 8.2%, but the group reported the successful online launch of its new Home Essentials brand, on April 1.

It said 91% of product sales are now digital.

Following the coronavirus pandemic, the group said it has reduced operating costs by 42.6%, with a material reduction in marketing expenditure.

Amended financing facilities provides the group with significant headroom, and, as at June 19, net debt was down 9.9% from year-end to £447.9m.

Chief executive Steve Johnson said: “The business has responded strongly to the challenges posed by the COVID-19 outbreak, highlighting our resilience as a business and I thank every single one of our colleagues who have worked so hard to keep us operational, with safety and our customers in the front of their minds.

“The crisis will cast a lasting shadow over the sector, but we are confident that our agile approach and attractive brand offerings, with clear target customer segments, position us well to navigate the issues and emerge as a stronger business.

“In a year of restructuring for the group, Simply Be, JD Williams, Jacamo and Ambrose Wilson all grew digital revenue and, following further progress in the first quarter of this financial year, 91% of our product revenue now comes from digital channels.

“The retail environment remains heavily promotional and the regulatory challenges in financial services have required us to adapt and evolve our offer, but our commitment to driving operating efficiencies is creating the right platform for the future.

“Trading in the first quarter of this financial year was impacted by COVID-19, but sales in recent weeks have shown an improving trajectory and cash collections have been stable. Operating costs are significantly lower than last year and net debt has decreased.”

He added: “As we move forward, we have refreshed our strategy, evolved our key pillars of growth and are pushing on with further work to streamline our brand portfolio, improve our product, create a brand new Home proposition whilst improving our digital capabilities and developing our financial services offer.

“Challenges remain in the year ahead, but we are focused on accelerating the business and are confident we are taking the right actions to create a sustainable, profitable business for the long term which has the potential to generate significant value.”

Click here to sign up to receive our new South West business news...