N Brown in discussions with lenders due to product sales dropping by 40%
On Monday, retail giant, N Brown reported that whilst trading in the first two weeks of its new financial year was in line with expectations, recent sales had dropped by 40%.
The leading retail group, behind brands including Simply Be, JD Williams, Jacamo, Ambrose Wilson and Fashion World said in the last week that it had seen “a very significant and sudden reduction in customer demand with daily product sales down in excess of 40% compared to expectations."
N Brown added that it expected slow to continue, despite the company being online focused.
In response, the fashion giant has taken a number of actions to reduce costs and preserve liquidity, including reducing marketing spend “with immediate effect and for the foreseeable future if market conditions do not improve."
N Brown will also be “freezing all recruitment and reviewing organisational structures” and stopping stock purchases immediately "thereby aligning stock levels for SS20 with reduced customer demand."
The retail group is aiming to protect its liquidity and said it is considering all options in relation to the Government and Bank of England support packages for businesses. N Brown has financing facilities in place totalling £652.5 million and has maxed out much of this.
The retail group added it is in “collaborative discussions with its long-standing, supportive lenders and is exploring options in relation to maximising the value of its significant unlevered debtor book."
Due to the initial impact of Coronavirus outbreak, N Brown's board will not be advising a final dividend for the financial year ended February 29, 2020 and will suspend dividend payments until further notice.
In addition the fashion group believes its previous guidance of £70 million to £72 million in adjusted pre-tax profit won’t be met. The companies full-year results for the 12 months to February 29 will be released on April 29.