N Brown reports recovery in revenue trajectory
N Brown, parent of Simply Be, JD Williams and Jacamo, has posted revenues in the 18 weeks to 2 January (Q3) down -8.9% year-on-year, however the performance shows an improvement in its revenue trajectory after a sharp drop in sales at the start of the pandemic.
The home shopping group, which recently raised £100m through a share placing and moved from the main London Stock Exchange to AIM, saw produce revenues drop 28.8% in the first quarter of its financial year and 12% in the second quarter.
Its recovery in revenue trajectory was driven by a pivot to home & gift with particularly strong demand for computing (+115%), gaming (+50%) and white goods (+48%). Home & gift sales now comprise 42% of product revenue, compared to 32% in the same period last year.
Within apparel the group achieved strong growth in leisurewear and nightwear offset by a decline in dresses, formalwear and swimwear.
The group's five strategic brands delivered product revenue down a -1.4%, in a period when group marketing costs were 40% lower than the prior year, and the company said it was particularly pleased with the performance of JD Williams and Home Essentials. It also growth in online customer accounts in JD Williams, Simply Be, Jacamo and Home Essentials in the period.
Its recent fund raising went towards clearing all unsecured debt and it now has a cash position of £83.7m. It will use the cash to invest further in its digital capabilities and accelerate its growth strategy.
The group said it was experiencing some supply chain issues with delays on deliveries as a result of global container issues but was working towards resolving those and minimising the impact on customers.
Looking forward it expects to deliver FY21 adjusted EBITDA of between £84m to £86m, while Capex will be c.£23m, as it accelerates its growth strategy.
CEO Steve Johnson said: “We remain focused on our number one priority of looking after our colleagues, whilst ensuring the business has the agility to respond to the ever-changing external environment and can continue to serve our loyal customers.
"We continue to move through the acceleration phase of our strategy; simplifying and strengthening our core brand proposition whilst improving our digital capabilities. This is generating continued momentum within the business, despite the difficult macroeconomic backdrop. We saw a continued recovery in product sales over the key Christmas period with particular strength in our Home & Gift proposition.
"We were pleased to recently complete our successful capital raise, which will help us continue the acceleration phase of our strategy and create a sustainable business delivering profitable growth over the long term. We remain mindful of the ongoing uncertainty in the UK retail environment, but as a digital business, we look forward to building on the unique strength of the Group’s brands in 2021 and beyond.”