Sales dip, but N Brown's strength in clothing and footwear lifts Q3
A “strong peak performance” in Clothing & Footwear underpinned by rising demand its core strategic brands and a return to growth in active customer numbers were the key positives in a busy Q3 for N Brown.
But that failed to prevent total sales for the quarter to 1 January falling 3% on a year ago to £267.6 million, dented by a managed decline in ‘other brands’ and softer demand for Home & Gift.
But despite Covid uncertainty, a volatile consumer environment and supply chain issues, “the business has performed resiliently over the peak period,” CEO Steve Johnson noted.
He called the continued growth of its strategic brands and a return to growth in active customers “particularly pleasing.”
Those Strategic Brands (JD Williams, Simply Be, Ambrose Wilson, Jacamo, Home Essentials, High & Mighty and House of Bath) saw Q3 sales rise 5.5% to £149 million on a year ago.
Success here helped its see a resurgence in Clothing & Footwear with growth of 18%, including increased demand for dresses, formalwear and outerwear, “demonstrating the appeal of our strengthened product offer.”
Johnson noted that the retailer “was now seeing more people than ever shopping with Simply Be and Jacamo. JD Williams is also resonating well with customers, particularly on the back of our successful [marketing] partnerships with Amanda Holden and Davina McCall.”
And total active customers also returned to year-on-year growth, “reflecting both improved customer retention rates and new customer acquisition”. Total active customers ended the period at 2.91 million, up from 2.87 million a year ago, with Simply Be and Jacamo hitting “record levels”.
By comparison, Other Brands (Fashion World, Marisota, Oxendales and Premier Man) saw sales fall 30.5% to £32.2 million following the “managed decline” in its legacy and other brands, which now represent less than 20% of product revenue.
Home & Gift sales were lower year-on-year, down 19%, “against tough lockdown comparatives”, N Brown noted.
Excluding the impact of the closure of the Figleaves website in March 2021 (rolled into Simply B), Q3 product revenue was slightly ahead of the prior year and up around 5% FY22 year-to-date.
“We entered the peak trading period well prepared, with good product availability, and successfully managed the ongoing global supply chain challenges,” added Johnson.
However, product return rates also grew as the product mix moved back into Clothing & Footwear, and particularly into higher returning segments such as dresses. Returns rates, however, were 3% lower than pre-pandemic levels, “inclusive of the benefit from the stronger product offer”.
For full year FY22, N Brown now expects revenues to be just 1.7% ahead of the previous year at £614.4 million. Adjusted EBITDA is expected to range £93 million-£96 million, at the lower end of its previously guided range, “reflecting the online market conditions and a slightly higher level of project spend now being expensed rather than capitalised”.
Johnson added: “We have continued to execute on our plan and, looking ahead, will continue our strategic investment to transform the business, supported by a robust balance sheet and a strengthened executive team.”
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