N Brown FY18 revenues up 3.9 percent to 922 mn pounds

N Brown Group revenue for the year ended March 3, 2018 was up 3.9 percent to 922.2 million pounds (1,285.8 million dollars), with product revenue up 4.1 percent and financial services revenue up 3.5 percent. While Simply Be revenues were up 16.3 percent, relaunched JD Williams brand at the start of the second half, saw a 21 percent increase in new customers. Adjusted trading profit before tax was 81.6 million pounds (113.7 million dollars), up 1.3 percent, while the statutory profit of 16.2 million pounds (22.5 million dollars) was heavily impacted by exceptional costs of 56.9 million pounds (79.3 million dollars).

Commenting on the company’s annual results, Angela Spindler, the company’s Chief Executive, said in a media release: “Against a challenging market backdrop I am delighted to be reporting profit growth, with Simply Be the standout brand. The second half was difficult for the fashion sector. A good performance in financial services provided the group with resiliency to enable us to continue to invest in our customer offer, successfully driving revenue and market share growth.”

Highlights of N Brown’s annual results

The company’s active customer file increased by 3.6 percent to 4.45 million. The active customer file of power brands increased by 2.4 percent. Online revenue was up 10 percent year on year, with online revenue of power brands up 17 percent. Online accounted for 73 percent of our revenue during the year, up 4ppts. 81 percent of sales from new customers, the company said, were generated online, up 4ppts. By brand, JD Williams saw the significant increase in new customer online penetration, from 80 percent to 95 percent. Mobile devices accounted for 76 percent of online traffic in the year, up 5ppts.

JD Williams’ product revenue was 163.4 million pounds (227.8 million dollars), up 3.2 percent year on year. N Brown said that the company experienced lower than forecast response rates from the recently migrated Fifty Plus customers during the second half. If Fifty Plus customers are excluded, JD Williams saw revenue up double-digit for the year as a whole.

Simply Be revenues were up 16.3 percent to 132.8 million pounds (185.1 million dollars) and active customers increased over 20 percent. Jacamo catering to 25-45 year old men of all body shapes and sizes, from small to 5XL saw product revenue rise 5.1 percent to 68.6 million pounds (95.6 million dollars), with active customer growth up high-single-digits.

Secondary brands revenue decreased by 3.8 percent to 149.2 million pounds (208 million dollars). The largest brand within this, Fashion World, was up in the first half but down double-digit in the second half. Figleaves revenue was down low single-digit. The remaining two brands within this category are High & Mighty and Marisota. High & Mighty was down double-digit, driven by disappointing footfall in its small store estate and Marisota was broadly flat, and is increasingly used as a product brand through JD Williams. The traditional segment recorded revenue growth of 3.3 percent year on year to 138.6 million pounds (193.2 million dollars), with online penetration of just under 40 percent.

Review of N Brown’s performance in core markets

The company said, USA revenue was 17.2 million pounds (23.9 million dollars), up 10.9 percent or 6.5 percent in constant currency terms. Revenue growth accelerated as the company progressed through the year, with 21.3 percent constant currency growth in the second half. Ireland delivered revenues of 17.5 million pounds (24.4 million dollars), up 8.9 percent or 2.7 percent in constant currency terms.

In our first quarter trading statement, N Brown announced the closure of five dual fascia Simply Be and Jacamo stores. Together these five stores contributed 5 million pounds (6.9 million dollars) revenue but accounted for the entire 2 million pounds (2.7 million dollars) operating loss of the company’s store estate in FY17. The store closures were completed at the end of the first half and resulted in an exceptional cost of 13.8 million pounds (19.2 million dollars). Overall, revenue from its store estate reduced to 19.9 million pounds (27.7 million dollars). N Brown currently has 20 stores open, split 12 dual Simply Be and Jacamo stores, and eight High & Mighty stores.

The company’s board has proposed the full year dividend consistent with last year at 14.23p. For fiscal 2019, the company expects product gross margin flat to up 100bps, financial services gross margin between negative 100bps to negative 200bps and group operating costs to rise between 1.5 percent to 3.5 percent.

Picture:N Brown website