N Brown Group is “over the hump” of its transition from a traditional home shopping business to an online retailer, its chief executive, Angela Spindler, said today.
“It’s a pleasure for me to be able to describe us an online retailer now,” she told Drapers. “We operate as online retailer in terms of speed and agility, tools and people.”
Spinder was speaking to Drapers after N Brown Group, which owns brands including JD Williams, Simply Be and Jacamo, reported that its adjusted profit before tax fell 8.7% to £80.6m in the year to 4 March. Group revenue was up 2.5% to £887.7m.
Spindler explained that there was improvement in the second half of the year, for two main reasons. First, the business continued its transition from an old to a new, more flexible way of working. It “massively reduced” its lead times by reviewing its sourcing, and was able to identify trends that were working well and replenish key styles in season.
“There was a big improvement in the second half, particularly in relation to repeats,” confirmed Spindler.
Second, N Brown Group reversed an efficiency drive in its “traditional segment” of smaller brands for older customers whereby it had simplified collections and aligned their marketing with JD Williams. This had hit first-half revenues.
“That didn’t work,” admitted Spindler. “So we created a more bespoke presentation style and ringfenced the team that looked after that customer. Sales were up in the second half.”
Womenswear performed particularly strongly for N Brown during the year, and Spindler said it is now the market leader in women’s size 20-plus fashion.
However, market share in menswear remained flat. Spindler explained that Jacamo, which targets younger men, had a good second half but its performance was diluted by Premier Man, which sits in the traditional segment and suffered the same issues outlined above.
The group entered the bridalwear market during the year, launching options for older and plus-size women. “We’re really pleased with it,” said Spindler. “We’re getting great customer engagement and it’s slightly ahead of expectations in terms of sales/demand.”
More considered promotions
Product gross margin fell last year as a result of N Brown’s promotional stance in the first half.
“The first half was a tougher half from a revenue perspective,” said Spindler. ”To ensure our stock position remained under control, and to stimulate demand in what was a challenging market, we ran more promotions.”
But she said this changed in the second half: “Our promotional content is becoming more considered, and less of a drag on our margin.”
She added that the dilution of its margin was also partly down to the adverse foreign exchange rates. To mitigate that, as well as taking a more considered approach to promotions and markdowns, N Brown is reviewing its sourcing. “Unlike some other retailers, we have a way to go in terms of sourcing efficiency,” Spindler pointed out.
N Brown increased the proportion of product sourced from the UK to 12% during the year, up from 6% the year before. “I see that continuing to grow as manufacturing capability improves,” said Spindler. ”We are a key sponsor of the regional growth fund [which seeks to drive investment in the textile supply chain in Britain]. We’ve identified some partners that are benefitting from the fund to work with.
“If you can find the right manufacturer in the UK it’s much more flexible, and the lead times are much better.”