Following today’s release of N Brown figures for the 6 weeks ending 16 May,
Sofie Willmott, Lead Analyst at GlobalData, a leading data and analytics company, comments:
‘‘Despite N Brown’s performance improving in the last six weeks compared to when the UK lockdown initially caused sales to plummet, the retailer has struggled to capitalise on demand shifting online. Other retailers have reported much stronger online uplifts and although N Brown has benefitted from selling products other than clothing & footwear (including electricals, toys and bikes), these categories account for a smaller proportion of its stock and have not been enough to prop up total sales.
N Brown’s product range, across its brands, is dominated by clothing & footwear which is set to be the hardest hit sector by COVID-19 with online spend forecast to decline 9.5% this year. Although many multichannel clothing & footwear retailers are seeing spend transfer online while their stores are closed, N Brown does not have stores and therefore has not experienced an online boost from this channel shift. 42.6% of UK consumers have spent more online as a result of the pandemic (according to GlobalData’s survey conducted in early May) so N Brown should have been able to capture some of the additional traffic and spend available digitally, however it appears to have missed out as its better known competitors have been shoppers’ first port of call. Lower brand awareness has put N Brown at a disadvantage and with its marketing expenditure being slashed by 80% this year, it is unlikely to acquire a significant number of new customers, relying on its existing shopper base to hold up sales.
N Brown has secured a three-year loan for up to £50m under the government’s coronavirus large business interruption loan scheme and this along with other provisions the retailer has put in place, including furloughing 30% of staff, freezing recruitment and salaries and reducing the pay of its senior team, will give it some breathing room in 2020. Its share price has risen as a result this morning, with investors feeling slightly more confident about the retailer’s future.”