18th Jun 2014 07:29
LONDON (Alliance News) - N Brown Group PLC said Wednesday it was on track for its plans for the current financial year, as it saw revenues rise 2.6% in the 15 weeks to June 14, boosted by growth at its Simply Be and Jacamo brands.
Revenue from Simply Be rose 6%, while at Jacamo revenue rose 10% compared to the same period in the previous year. The home shopping company said its online penetration remained strong at 58%, boosted by its introduction of Sunday deliveries.
Its brick-and-mortar stores continued to trade well, up 20% on a like for like basis, N Brown said.
N Brown said that it was continuing the process of broadening its appeal and accelerating its growth potential, including changing the way it goes to market.
It has sought to improve its product mix by shifting away from high-value electrical items and ranges which "attract disproportionate levels of bad debt and fraud". As a result of this shift, revenues during the period were reduced; and N Brown maintained its guidance that this will have a full-year negative effect of GBP13 million.
However, it said its gross margin and bad debt ratios have improved as a result of the shift.
N Brown intends to recover these sales through what it calls its "Famous Five" home and gift products, including bedding, home decor, family gifts, outdoor living and homewares. Revenues from these "Famous Five" areas were up 10% during the period, it said.
The company said that as a result of a shift in its marketing spend, its performance had "strengthened considerably" during the first quarter. N Brown said that whilst the adjustment of its marketing programme had resulted in broadly flat sales during March and April, it saw a higher growth rate in May and June.
It has reduced its spending on mailing brochures to customers, but continued its investment in digital marketing, leading to a 3.5% growth in its customer base during the period.
The company is continuing its plans to modernise its JD Williams brand, it said. It is re-launching mid-life ladies fashion under the brand for the autumn-winter season and is currently developing new advertising campaigns with brand ambassador Lorraine Kelly.
N Brown is continuing to push its Simply Be business in the US, and saw demand up 15% in that country during the period. The company said it is on track to deliver on its plans for international expansion for the year as a whole.
Customers have responded positively to N Brown's new cash payment option, it said, with 30% of new customers opting to pay in cash. The option has not materially influenced its overall customer recruitment rate, it said, but it does expect it to boost recruitment in the second half of the year as it adjusts its marketing approach.
Shares in N Brown down 0.1% at 434.82 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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