N Brown bucks tough home shopping market
Sales up as cost of lower margins
January 22 2004
Home shopping specialist N Brown has outperformed its rivals to grow sales, but has seen margins dip in a tough market.
Sales for the 20 weeks to January 16 grew by 3.2 per cent, with core home shopping sales up by 3.3 per cent. However, increased discounting and higher bad debt provision saw margins fall by 2.1 per cent.
N Brown said industrial action by Royal Mail workers in the autumn also disrupted sales during its peak trading period. The retailer responded by upping promotional activity, which helped sales recover but contributed to the margin reduction.
N Brown said it has reduced some customer credit limits and tightened up the availability of interest free credit in order to reduce bad debt rates. The company has focussed on retaining customers at the expense of margins, and has signed up 5 per cent more customers across the autumn. However, it expects full-year profits to be below expectations.
Group chief executive Alan White, said: “I am pleased to be able to report solid sales growth during the period in a challenging environment, albeit at the expense of gross margins.
“Looking ahead, we are starting to see some encouraging signs from our Spring/Summer catalogues and the continuation of this will be pivotal to our progress in the next financial year.”
