N Brown upbeat despite covid-19 pandemic
N Brown, the owner of Simply Be, JD Williams and Jacamo, has said it remains confident in its long-term prospects after reporting an improvement in trading in recent weeks following a “sudden and significant” decline in March due to the coronavirus pandemic.
In a trading update, the company said product sales have fallen by 25% in the last six weeks, although its board regards this as creditable performance under the current circumstances. During the period, sales in the home and gift categories climbed by 74% while clothing sales continued to be weak with a drop of 48%.
N Brown is continuing to benefit from a consistent stream of revenue and cash inflow from its financial services business throughout the crisis. Following FCA guidance, on 14 April it offered customers in financial difficulty the option to defer payments for three months which means it expects cash collections to trend lower over the coming months.
The pandemic has also led the company to take action to maximise operating efficiency and preserve liquidity. This has included reducing marketing spend by 80% and the furloughing of 30% of its staff. It has also put a freeze on both recruitment and salary increases, and its board members and senior leadership team have taken voluntary pay reductions from April to June. In addition, N Brown has agreed new financing arrangements with its longstanding lenders.
Steve Johnson, N Brown chief executive, said: “We are pleased to have secured support from both our banking partners and the Government’s loan scheme, which help to strengthen our financial position and gives us the flexibility and certainty to manage through this challenging period. In addition, the immediate and substantive actions we took at the very outset of this crisis have supported our working capital positively in this period.
“We have a unique portfolio of brands and products which appeal to a range of customer groups who can also benefit from our flexible payment options. As we further develop and improve our offer, we remain confident in the long-term prospects for the business as we emerge from these challenging times.”
Given the uncertainty generated by the coronavirus pandemic, the company said it is unable to provide any guidance at this stage for the financial year ending 27 February 2021. It will release its results for the year ended 29 February 2020 in mid to late June.
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