N Brown remains upbeat despite fall in profits
Home shopping group N Brown saw an increase in both revenue and like-for-like sales in its first half although pre-tax profit declined by 4.5% to £42 million.
In the 26 weeks to 1 September, total revenue increased by 4.3% to £379.3 million while like-for-like sales grew by 3.7% with growth accelerating in the second quarter. In the six weeks ending 13 October, total sales grew by 10.1% and were up 9.4% on a like-for-like basis.
The company said the revenue growth was driven by a combination of strong online trading, sales of brands targeted at the under 50s, and a higher level of financial income.
Operating profit fell by 2.8% to £45.7 million after the company absorbed an anticipated £1.1 million of losses from the Simply Be concept stores and a £1.3 million increase in the depreciation charge.
N Brown’s internet sales increased by 12% to £196 million in the period and accounted for 53% of home shopping revenue compared to 48% in the same period in 2011. Following major investment in its online systems, the company said it was continuing to see significantly higher average order values and lower transactional costs from customers ordering through its online channels. In addition, access to its websites from mobile devices had increased dramatically with 18% of online sessions now originating from a mobile device.
Sales from brands targeted at customers under the age of 50 rose 12% to £143 million. The Jacamo menswear brand grew the fastest with sales up by 40% while the Figleaves lingerie brand also performed strongly as it reaped the benefit of last year's cost reduction programme.
Sales from brands targeted at the over 50's were level with the first half of last year at £236 million, and accounted for 62% of total sales.
N Brown said one of its main objectives this year was to boost the size of its active customer database, which had fallen by 5% in the same period last year. The company said sales from new customers was up by 20%, due to the increased recruitment activity.
N Brown chief executive Alan White said: "I am delighted that the revenue and gross margin trends have been on an upward trajectory throughout 2012. We have seen double digit growth in the revenue from our younger brands, such as Jacamo and Simply Be, and in our menswear and home and leisure product ranges.
"The 10.1% increase in sales at the start of the second half is also very encouraging and all our major brands and product areas have contributed to this growth. This gives us some optimism in the outlook for our second half performance."
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