N Brown’s statutory pre-tax profit fell 21.2% from £96.8m to £76.3m in the year to February 28 as efforts to modernise the business proved “more disruptive than anticipated”.
The multichannel group, which includes plus-size womenswear brands JD Williams and Simply Be, plus-size menswear brand Jacamo and lingerie etailer Figleaves, had already warned investors in March that its full-year results were likely to be “slightly below” market expectations of £88m.
Today it confirmed the investment in making the business digital first combined with weak trading over the warmer than usual autumn hit its bottom line.
Group revenue during the 52-week period was flat at £818m. However, the modernisation programme appears to be bearing fruit, as online sales rose 62% during the fourth quarter and 59% for the full year.
N Brown said the relaunch of JD Williams was on track, with a double-digit increase in customer numbers.
Chief executive Angela Spindler said: “This last year was an important one for our company. We are comprehensively modernising the business in terms of organisation, capability, infrastructure and processes to adopt a digital-first mindset and to ensure we are fit for the future of retail.
“We are improving our product proposition and competitive position by investing in quality and price. We have also rephased our seasonal product and marketing to better reflect consumer spending patterns and to bring the business into line with a modern clothing retail model.
“Step-changing the way the business operates and goes to market in some key areas proved more disruptive than anticipated and this, combined with a weak autumn trading period across the sector, led to a profit performance below expectations.
“We are, however, improving the sustainability of future profit growth and look to the year ahead with confidence.”
Chairman Andrew Higginson added: “The scale and pace of change required to modernise the business put a great deal of strain on our performance in a difficult year for the clothing sector. The fall in profits was nevertheless a disappointment. However, we laid important foundations for profit recovery and long-term growth.
The group’s guidance for 2015-16 is unchanged.
“We have now bedded in many of these changes and this year will see us push on with executing our strategy.”