N Brown suffers during lockdown due to heavy reliance on apparel

Following today’s release of N Brown FY figures for 2019/20, and Q1 figures for FY2020/21;

Sofie Willmott, Lead Retail Analyst at GlobalData, a leading data and analytics company, comments:

“The lack of demand for clothing & footwear during the UK lockdown period has severely hindered the start of FY2020/21 for N Brown as its older customers held back spending on non-essential categories, dragging down Q1 results. N Brown’s younger brands performed better with Simply Be’s Q1 product sales down 16.2% in comparison to its brand that targets mature shoppers, Ambrose Wilson, declining 44.4%, however the retailer has overall failed to benefit from spend shifting online during the pandemic.

“Other online pureplays have been able to capitalise as more shoppers have ventured online and current shoppers have spent more, namely the boohoo group which though not a direct competitor, has proven that it is not all doom and gloom in the clothing sector. Its UK sales rose 30.2% for the three months to 31 May 2020, benefitting as its value competitor Primark closed its sole sales channel and younger consumers continued to shop. But N Brown has strong competition online from the likes of Next, The Very Group and ASOS and has struggled against these better-known players to steal spend and shoppers from its multichannel counterparts that have been forced to close stores including M&S and Debenhams.

“Despite disappointing product sales in both FY2019/20 and Q1 FY2020/21, N Brown has focused on cutting costs and as a result has improved operating margins. The retailer swung to an operating profit of £48.1m in FY2019/20 versus an operating loss of £47.7m the previous year giving shareholders hope for this year that profitability is not likely to be as hard hit as sales performance.

“Clothing & footwear spend is forecast to fall 31.4% in 2020 with the only ray of light being the online channel which will remain in positive growth territory. Considering this, N Brown will be better protected in comparison to many multichannel retailers that will struggle to recoup store sales lost from being closed for three months. Although N Brown’s Q1 results are disappointing, the retailer is through the worst of the pandemic and performance should improve throughout the rest of the year with its new strategy giving it a clear direction.”

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