N Brown revenues slide as it confirms £100m cash raise
N Brown, the home shopping group, posted a 17.6% slide in interim revenues to £356.7m this morning as it confirmed plans for a £100m cash raise.
The parent of Simply Be and Jacamo also announced a 28.9% drop in adjusted profit before tax for the 26 weeks to 29 August to £22.6m. However the company said the drop in product revenue improved during the second quarter from -28.8% in Q1 recovering to -12.0% in Q2 supported by the launch of its Home Essentials brand in April.
N Brown, which has a background in catalogues and formerly operated physical retail stores, said that it was now achieving 92% of its sales through its digital channels thanks to its digital transformation strategy.
The company, which specialises in plus size and mature clothing ranges, has also been streamlining its brand portfolio with the High & Mighty brand merged into Jacamo and House of Bath into Ambrose Wilson.
It said that a greater proportion of its ranges (65%) were now designed in-house with premium brands such as Hugo Boss and Ralph Lauren "extending the 'best' element of our range".
N Brown also confirmed reports last night that it was planning a £100m equity raise, by way of a fully pre-emptive placing to the Substantial Shareholder, and the transition of its listing from the main stock market to the junior market AIM.
CEO Steve Johnson commented: "We continue to transform the shape of N Brown against the uncertain backdrop of COVID-19, and I am hugely grateful to all our colleagues who are enabling us to do this.
"Our core, streamlined fashion brand proposition, supported by ever-more sophisticated digital capabilities, have driven a recovery in product sales since the initial impact of the pandemic. This has been supported by a strong uplift in Home and Gift sales following the launch of our new Home Essentials brand, with customers looking to improve their homes amidst the UK restrictions. We also continue to support customers wishing to use our flexible credit solutions.
"Having restructured the business and transitioned to more than 90% of revenues from digital, we now see a clear opportunity to capitalise on various industry drivers, not least the increasing trend towards online retail, and further improve our customer proposition. Today's separately announced proposed capital raise will give us the firepower to invest further in our digital capabilities and accelerate our growth strategy, whilst significantly strengthening the Group's balance sheet to provide us with ongoing flexibility and a strong platform from which to deliver attractive returns for all of our shareholders.
"Whilst we are mindful of an uncertain UK retail environment, we are confident we can continue to build on the unique strength of the Group's brands. We remain focused on creating a sustainable business delivering profitable growth over the long term."