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N Brown defies credit crunch with strong first half

Home shopping giant NBrown's pre-tax profits soared 19.6% to £40.8 million in the six months to August 30, despite the economic turmoil and declining consumer confidence.

Sales rose 12.6% to £322.8 million, boosted by an increase in the number of new and established customers. The retailer said the rapid switch from telephone to online ordering has continued during the period.

Telephone orders were level with last year but online sales grew by 45% to £106m and now represent 33% of total revenue. This increase is partly due to a growing proportion of new customers being recruited online.

Chief executive Alan White said: "Our strategy is to always look at means of improving our product ranges, websites and catalogues has enabled us to deliver strong growth across our portfolio of brands. We will continue to further develop our channels to market and enrich our product offer. The uncertain length and depth of the economic downturn still worries retailers generally, but the increase in sales for the first five weeks of 11.8%, give us confidence that we can continue to deliver growth in the second half."

The retailer said sales were also boosted by the favourable demographics of its customer base. The largest group, the midlife titles which target customers aged 45 – 65, grew by 9% to £214m, including good results from JD Williams, Oxendale Ireland, Premier Man and Marisota.

The group said its younger titles, targeted at customers aged below 45, continued to grow at the fastest rate, and saw sales increase by 21% to £94m. It said Jacamo and Simply Yours, which were launched last year, have continued to do well, complementing strong growth from the Simply Be and Fashion World Brands.

However, N Brown said it is not immune to troubles in the wider market. Chairman Lord Alliance of Manchester said: "The length and depth of the economic downturn could ultimately have an impact on our customers’ financial situation but, in the meantime, we are continuing to develop the business. However, we will be holding our recruitment spend in the second half at last year’s level and keeping a tight control on costs. In addition, as a precautionary measure, we have tightened our credit policies and will monitor closely any changes in the performance of the debtor portfolio."

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