16th Jan 2020 09:27
(Alliance News) - N Brown Group PLC issued a profit warning on Thursday, reporting a mixed performance from its retail arm, amid a "highly promotional market" and struggles in its financial services unit.
Shares in the company were 25% lower at 107.00 pence each in London on Thursday morning.
Total revenue in the 18 weeks to January 4 fell by 5.0%. Womenswear saw revenue rise by 1.1% year-on-year, with digital revenue up 6.7%, predominantly due to growth in its Simply Be brand.
In Simply Be, revenue climbed 12% on last year and online revenue alone was 13% higher.
Elsewhere in Womenswear, there was a mixed performance with both JD Williams and Ambrose Wilson reporting year-on-year digital revenue growth of 0.4% and 7.9% respectively, though they both had overall revenue declines. In JD Williams, total revenue fell by 4.0% and in Ambrose Wilson, it slumped 9.6%.
In the Jacamo menswear brand, digital revenue was 3.2% higher, pushing overall revenue up by 2.5%.
N Brown is scaling back operations in its Products Brands unit, and total revenue was 15% lower.
Chief Executive Steve Johnson said: "This has been an encouraging period of peak trading for the business in a highly promotional market, as we delivered digital revenue growth across both Womenswear and Menswear with particularly strong digital growth from Simply Be and Ambrose Wilson as customers responded well to our ranges."
In Financial Services, which allows customers to pay for purchases on credit, revenue was down by 4.6%. N Brown said it was forced to continue "tightening its lending criteria".
The company said: "In response to wide-sweeping regulatory intervention across the financial services sector, the group continued to make a number of significant changes to the way it manages its debtor book."
Full-year adjusted pretax profit of expected to be in the range of GBP70 million and GBP72 million, compared with the market consensus range of GBP78.0 million and GBP84.1 million.
"Our expectations remain that the retail market will continue to be challenging and promotional, but we are focused on our clear strategy of delivering profitable digital growth," Johnson added.
By Eric Cunha; [email protected]
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