Revenue decline narrows at online retail group

Manchester-based online retailer, N Brown, has reported an improvement in its revenues trajectory in a third quarter trading update today.

The business, which moved to an AIM listing last month, said that the decline in group revenues in the 18 weeks to January 2, was 8.8%, which compared with a 13.4% decline in the second quarter, and a 21.9% decline in the first.

Throughout this, it said its financial services cash collection rates remain stable.

There has been a strong switch to Home & Gift customer demand, during pandemic lockdowns, enabled by the agility of the business model.

Home & Gift sales now comprise 42% of product revenue, compared with 32% in the same period last year. In line with lockdown trends, within Apparel the business saw strong growth in leisurewear and nightwear, offset by a decline in dresses, formalwear and swimwear.

Net cash, at January 2, 2021, stood at £83.7m, helped by a £100m fundraising exercise completed last month, coinciding with its switch to AIM.

Today’s update said the group, which includes the Jacamo brand, continues to trade in line with its expectations and expects to deliver a 2021 adjusted EBITDA of between £84m and £86m.

It also revealed that, as with a number of other retailers, N Brown is currently experiencing delays of two to three weeks for many of its stock deliveries, given global container issues, as well as cost pressure in the supply chain.

It said it is working through the operational challenges this presents and is looking to minimise the impact on customers.

For the remainder of the 2021 financial year, net debt is now expected to be in the range of £285m to £305m, down from £497.2m at the end of fiscal year 2020, and exceptional costs, driven by restructuring costs, are expected to be around £10m.

Chief executive, Steve Johnson, said: “We continue to move through the acceleration phase of our strategy, simplifying and strengthening our core brand proposition whilst improving our digital capabilities.

“This is generating continued momentum within the business, despite the difficult macroeconomic backdrop.

“We saw a continued recovery in product sales over the key Christmas period with particular strength in our Home & Gift proposition.

“We were pleased to recently complete our successful capital raise, which will help us continue the acceleration phase of our strategy and create a sustainable business delivering profitable growth over the long term.

“We remain mindful of the ongoing uncertainty in the UK retail environment, but as a digital business, we look forward to building on the unique strength of the group’s brands in 2021 and beyond.”