N Brown cheers online sales hike in "challenging" market

N Brown has posted further sales declines, but has insisted its turnaround strategy is bearing fruit in “challenging” markets as online trade lifted.

The group said total revenue dropped -3.8% in the 13 weeks to June 1, dragged lower by a -5.4% fall in product sales from the managed decline of its traditional mail order business.

Its shift away from legacy catalogue brands saw online sales rise 3% in its first quarter, with 83% of total revenue now digital.

Manchester-headquartered N Brown said online sales of its so-called power brands JD Williams and Simply Be rose 5.9% and 4.6% respectively, with a 10.1% surge for Ambrose Wilson.

Online sales of womenswear lifted 5.7% and menswear increased 8.8%.

Product brands revenue dropped 12.7% in the quarter, but N Brown said this was in line with its strategy to scale back unprofitable offline marketing and recruitment.

The figures showed financial services revenues lifted 8% in the quarter.

Recently-hired chief executive Steve Johnson said: “We’re pleased to report a solid trading performance in the first quarter.

“In line with our strategy, we delivered digital revenue growth across JD Williams, Simply Be, Ambrose Wilson and Jacamo as we continue to improve our customer offer whilst managing the decline of our legacy offline business.”

He added: “The retail market remains challenging, but we have a clear strategy to deliver profitable digital growth and our full-year expectations are unchanged.”

Shares lifted 1% higher after the update.

The figures come after a tough 2018 for N Brown, which recently lost a long-running dispute with the taxman and saw the abrupt departure of former chief executive Angela Spindler.

N Brown said it is still considering appealing against the VAT ruling in November, which will mean marketing costs are now likely to be between £6m and £9m higher from 2020 due to irrecoverable tax.

The group has been repositioning itself as an online retailer to move away from its traditional mail order roots, also announcing last June that it would close up to 20 stores.

Caroline Gulliver, a retail analyst at Jefferies, said N Brown is “moving in the right direction”.

She said while the decision to move away from catalogue sales is acting as a drag on sales, it will be “helpful to profits”.