N Brown upbeat on womenswear growth, US site on track despite late launch

By

Sandra Halliday

Published
Jan 19, 2017

N Brown said Thursday that its transformation is on track and the figures it gave us for Q3 certainly seem to support that view. The omnichannel retailer, which targets larger sizes and the 50-plus market, said it saw double-digit growth in womenswear in the 18 weeks to December 31.

The figures were much better than retail peer Bon Marché, which on Friday reported a weaker season as it chose to protect margins rather than chasing sales. Click here for the full details.

Group revenue rose 4.1% and product revenue was up 5.9%,. And while financial services revenue dipped 0.5%, careful management meant gross profit from it rose. Online revenue rose 12% and that’s key as online now accounts for 70% of its overall business, up 4 percentage points year-on-year. And it looks like e-tail is set to become even more crucial for the firm as 77% of new customer demand was generated online.

In Q3, the company said order frequency and units per basket both recorded good year-on-year growth, although average selling price was slightly down, as planned, as it invested in price.

Meanwhile mobile devices made up 72% of traffic, up five percentage points, and conversion on mobile devices continued to improve. Within this, smartphones accounted for 49% of all traffic and smartphone conversion increased by 7%. But there’s a downside to this. Overall, the increase in traffic from this device type, which naturally has a lower conversion rate, meant that the overall rate was slightly down, as expected.

N Brown launched its new US website in September, slightly later than initially planned. This unsurprisingly impacted performance through the peak period with revenue down 3.5% year-on-year (or a huge 19% on a constant currency basis). But it said the site is performing well and “we remain very confident in the market opportunity.”

At the category level, womenswear recorded the strongest growth, up in double-digit.s Menswear and Homewares both recorded mid-single-digit revenue growth and Footwear was flat, although the company did not say why. Encouragingly, it saw a further improvement in the group returns rate year-on-year.

Importantly, N Brown saw a strong performance for its trio of ‘Power Brands’ (JD Williams, Simply Be and Jacomo) with revenue up 10% and the active customer file up 13%, despite the overall active customer file for the group being flat.
It said it is in the process of migrating customers from the Fifty Plus title into the JD Williams brand. This process is “on track and, although it still represents a headwind, this has materially lessened, with Fifty Plus broadly flat year-on-year.”

And it is clear why the company has such a strong focus on those Power Brands. During Q3, JD Williams achieved double-digit revenue growth, with online performance especially strong. Its new The Cut collection, featuring current season styles at value price points, significantly exceeded its expectations. If the Fifty Plus title is added-in, revenue of JD Williams overall was only up in high-single-digits.

Meanwhile, Simply Be revenue also grew in double-digits, driven by continued improvements in the product range and a strong online marketing campaign.

Jacamo only grew in mid-single-digits, but this was against a tough comparison with last year’s performance. The company said it has continued to champion diversity in male fashion, with its Real Man Runway model search and recent #FashionForEveryMan demonstration “both attracting great customer and media attention.”

CEO Angela Spindler said while the period saw “standout performances” from womenswear and the Simply Be brand, “all key brands and categories grew in the period, including our Traditional titles which had diluted performance in the first half.”

The Support Brands and Traditional segment both recorded only low-single-digit revenue growth. Within the Support Brands the strongest performer was Fashion World. But the Traditional titles are now back into positive year-on-year growth, “benefitting from the actions taken to improve product and presentation over the season.”

Spindler added that the firm is benefitting from “improved trading agility as a result of the transformational changes we have made.” This was reinforced by its performance across Cyber Fortnight (the period around Black Friday) which resulted in two record-breaking weeks for the business.

But while the company said it is comfortable with current profit forecasts (around £79.5m before tax), Spindler stressed that “we are operating in what continues to be a challenging period for the industry and are still in the process of delivering some key elements of our transformation plan."