Following today’s release of N Brown H1 figures for 2020/21, Alex Hardy, Retail Analyst at GlobalData, a leading data and analytics company, comments:
“A dependence on apparel, as well as an older customer base, stifled N Brown’s performance in the first half of FY2020/21, with group revenue falling 17.6%. While the older age groups are underserved in the clothing & footwear sector, making it a good move for the retailer to target them in the long term, older shoppers’ appetite for spending throughout lockdown fell significantly, more so than their younger counterparts. With revenues suffering, N Brown took decisive and essential action including cutting marketing expenditure to achieve operational cost savings, enabling it to reduce net debt by 17.3%. These actions have paid off with the retailer forecasting that at least 75% of the gross profit decline will be offset, resulting in its share price rising 7.9% in early morning trading.
“These weak results will be disheartening for N Brown, as despite placing a strong emphasis on being a leading digital retailer, through developing apps for its brands and winding down its offline business, it has failed to capitalise on the significant shift to online this year. The UK online clothing & footwear market is forecast to grow by 7.4% in 2020, so the pressure is on to improve sales in H2, especially with Christmas on the horizon, or it risks losing significant market share to the likes of Next and H&M.
“N Brown must work on building destination appeal to compete with other online pureplays which have seen impressive growth during the pandemic. While not a direct competitor, the boohoo group’s UK revenue in the same period rose 36.6%, reflecting its strong ability to attract its core shopper base and engage with customers through social media, so N Brown’s focus must be on increasing its brand awareness and reputation. The Very Group has also thrived throughout the lockdown period, growing retail sales by 36% in the three months to the end of June, despite a decline in fashion, due to its strong multi-category offer. While N Brown’s range extends across home, beauty and electricals, it must build its presence in these sectors further and continue to diversify its product offer, as well as place even greater emphasis on its new Home Essentials brand, which had a successful launch during the period.”