Shorter lead times from European suppliers help group beat analysts’ expectations
Shorter lead times and offering “great product at value for money” will help N Brown get back on track in the tough trading environment, chief executive Angela Spindler said today.
This morning, N Brown revealed that its group revenue increased by 1% year on year to £429.4m for the six months to 27 August. Pre-tax profits fell by almost 20% to £31.6m, but this was better than analysts expected.
Spindler told Drapers N Brown, which owns brands including Jacamo, Simply Be and JD Williams, achieved the revenue uplift during a “very challenging” season because of flexibility in its supply chain.
“The agility of our product sourcing has really helped in the current climate, which is set against a volatile background in terms of weather and consumer sentiment. The improvements in our flexibility are helping us through the tough trading environment.”
N Brown has doubled the amount it sources from Europe over the last two years, so the firm can now turn product around in three weeks rather than 10. It can also buy into repeats in seven days rather than seven weeks.
“It’s a step change for us,” Spindler added. “Some of our suppliers have worked with us for a long time and they have embraced the process improvement. We are also working with some new suppliers and the UK is featuring more highly on our plans moving forward.”
The chief executive said autumn 16 has started in line with expectations and the firm is comfortable with current market expectations for the full year, which is profit before tax and exceptions of £80m.
Spindler said the retailer’s new value range for JD Williams, The Cut, which offers a selection of key products at lower prices at the beginning of the season rather than discounting later on, has boosted early autumn trading.
“We are on plan for the season to date and The Cut, which is a combination of great product and value for money, is doing really well. It is fashionability and style at low prices and that is really resonating with our shoppers. Our traction on those 300 products is up 75% year on year,” she added.
Spindler said the retailer does not intend to increase prices next year as a result of the weakness of sterling following the Brexit vote. The business is fully hedged for this year and 50% for 2017, and will mitigate costs through better buying and improving efficiency.
“[Currency volitility] is a real challenge for the industry, and we have to pull out our best trading and treasury skills,” said Spindler. “We have a bit of exposure but we are working to mitigate the costs. Our focus is on delivering value for money for customers, that’s very important to us.”