Online retail group to raise £100m and switch to AIM

Steve Johnson

N Brown, the Manchester-based online retailer, is to raise £100m, de-list from the main stock exchange and switch to the Alternative Investment Market, it announced today, alongside its interim results for the six months to August 31.

The business said of the £100m is fully supported by Lord Alliance of Manchester, the ‘substantial shareholder’ and his son, Joshua Alliance.

The group said it sees a compelling opportunity to derisk and accelerate its refreshed strategy by eliminating unsecured net debt and bringing forward strategic investment.

Alongside the intention to raise £100m of new equity capital it said it aims to agree new extended facilities to strengthen the balance sheet and allow targeted investments to accelerate delivery of the growth strategy to capitalise on the structural tailwinds in the group’s markets.

NM Rothschild is acting as the lead financial adviser and joint sponsor of the fund raising, along with Jefferies International as joint financial adviser and joint sponsor to the company.

N Brown chief executive, Steve Johnson, said: “Having restructured the business and transitioned to more than 90% of revenues from digital, we now see a clear opportunity to capitalise on various industry drivers, not least the increasing trend towards online retail, and further improve our customer proposition.

“The proposed capital raise will give us the firepower to invest further in our digital capabilities and accelerate our growth strategy, whilst significantly strengthening the group’s balance sheet to provide us with ongoing flexibility and a strong platform from which to deliver returns for all of our shareholders.”

Subject to shareholder approval, the company anticipates that the delisting and the AIM admission will take effect simultaneously on, or around, December 23.

Today’s half year results announcement revealed a fall in six month revenues and profits.

Turnover for the period fell from £432.9m to £356.7m, while pre-tax profits of £14.1m were down from £18.8m the previous year.

Chief executive, Steve Johnson, said: “We continue to transform the shape of N Brown against the uncertain backdrop of COVID-19, and I am hugely grateful to all our colleagues who are enabling us to do this.

“Our core, streamlined fashion brand proposition, supported by ever-more sophisticated digital capabilities, have driven a recovery in product sales since the initial impact of the pandemic.

“This has been supported by a strong uplift in home and gift sales following the launch of our new Home Essentials brand, with customers looking to improve their homes amidst the UK restrictions. We also continue to support customers wishing to use our flexible credit solutions.

“Having restructured the business and transitioned to more than 90% of revenues from digital, we now see a clear opportunity to capitalise on various industry drivers, not least the increasing trend towards online retail, and further improve our customer proposition.

“Today’s separately announced proposed capital raise will give us the firepower to invest further in our digital capabilities and accelerate our growth strategy, whilst significantly strengthening the group’s balance sheet to provide us with ongoing flexibility and a strong platform from which to deliver attractive returns for all of our shareholders.”

He added: “Whilst we are mindful of an uncertain UK retail environment, we are confident we can continue to build on the unique strength of the group’s brands. We remain focused on creating a sustainable business delivering profitable growth over the long term.”

Eversheds Sutherland is advising N Brown, led by partner Daniel Hall and legal director Jamie Partridge, assisted by senior associate Annika Unsworth and associate Jaanzeb Khan.

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