Online group posts first half decline due to weak consumer confidence

Manchester-based online fashion and homeware retailer, N Brown Group, has reported a decline in first half revenues and profits.

According to its latest trading update for the 26 weeks to 27 August 2022, group revenues fell 4.6% to £331.5m, while pre-tax profits sunk 74.6% to £7.2m.

N Brown blamed weaker consumer confidence on its performance and indicated that, based on continued macroeconomic uncertainty and inflationary pressures, it expects the second half to decline at a similar rate to that seen in Q2 where product sales fell 9.4%.

It added: “As a consequence of the above factors, we now expect FY23 Adjusted EBITDA in the region of £60m before growing again as the group’s strategy is executed.

“At the end of FY23, we expect the group to maintain a strong unsecured net cash position and for net debt to be below FY22’s closing position, whilst continuing to have full access to the £100m RCF, allowing us to further progress our transformation strategy.”

Chief executive, Steve Johnson, said: “In a difficult period of weakening consumer confidence, we’ve balanced our objectives between disciplined trading – with a focus on upholding margin – and delivering on our long term strategy to transform the business.

“Our teams have worked relentlessly to launch Simply Be’s new website, and early indicators give us confidence in the wider benefits for all our customers when we roll this out more widely across our other strategic brands. We anticipate continued softness in trading over the second half as macroeconomic pressures continue to weigh on consumers, despite government support.

“We will, therefore, maintain our focus on tightly managing both our costs and margins. At the same time, given our ongoing confidence in our strategy and the strength of our balance sheet, we will continue to invest in our digital transformation to deliver sustainable profitable growth.”

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