N Brown Group loses more than £100m in revenue
N Brown Group, owners of Simply Be and Jacamo, has reported revenues decreased by 13% (£108.7 million) to £729 million in the 52 weeks to 27 February 2021, as the impact of the COVID-19 pandemic on the business is revealed.
Product revenue declined by 14.4% to £468 million in the period, whilst financial services revenue decreased 10.4% to £260 million. Product revenue was 25.7% in Q1 and steadily recovered to be 4.3% in Q4.
The AIM-listed group's pre-tax profits also declined from £31 million to £18.5 million over the same period.
Following the sudden and significant decline at the onset of the pandemic, Product revenue made a steady recovery throughout the period predominantly driven by the performance of the strategic brands which ended the year in growth.
The Group was able to pivot its offer to meet customer demand of Home & Gift products, boosted by the launch of Home Essentials as a standalone website on 1 April 2020 and as a result, the percentage of Home & Gift product revenue increased from 29% in FY20 to 41% in FY21.
Customer returns rates were lower in the year due to a combination of mix into the lower returning Home and Gift products as well as an underlying improvement through the pandemic period.
In June 2020, N Brown Group announced its refreshed strategy to return to sustainable growth by developing stronger brands and product propositions for its customers. The group noted its progress in transformation and have now "accelerated" the strategy driven by five growth pillars:
- Distinct brands to attract broader ranges of customers
- Improved product to drive customer frequency
- New Home offering for customers to shop more across categories
- Enhanced digital experience to increase customer conversion
- Flexible credit to help customers shop
Steve Johnson, Chief Executive, said: "In a year where we have all had to overcome multiple challenges, we have continued our transformation of the Group through a relentless focus on our five strategic brands, improving our product offering and enhancing our digital capabilities, all of which will position us better with our target customers. Although we remain cautious, we are beginning to see some early signs of progress."
"Our capital raise has enabled us to strengthen our balance sheet and allows us to accelerate our investment into strategic initiatives, particularly our digital platform and brand websites. Whilst wider consumer dynamics remain uncertain as we emerge from lockdown, we have significantly transformed the shape of the business from where it was at the start of the pandemic. I would like to thank every single one of our colleagues for helping us make those changes at pace, whilst delivering a very high standard of service to our customers through very difficult times."