N Brown hit by economics and rain
N Brown, the internet and catalogue home shopping firm, said sales were up but price conscious shoppers opting for value ranges had hit margins.
N Brown, the internet and catalogue home shopping firm, said sales were up but price conscious shoppers opting for value ranges had hit margins.
In the four months to the end of June the firm said total group revenue increased by 2.5%.
Like-for-like revenue growth was 1.9% after excluding sales from stores opened in the last year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The company said an overall improvement in sales disguised a significant variation in performance by product category.
Ladieswear revenues had been lower than expected, primarily due to the bad weather conditions, which Brown said depressed the sales of summer clothing.
It contrasted this rainy day performance with sunny weeks when it saw very strong sales and margins.
Menswear, footwear, lingerie and home and leisure product categories all showed growth but shoppers opted for value lines or those which had promotional discounts, the company said.
The firm's Chairman, Lord Alliance of Manchester, will later tell its AGM that this mix of sales resulted in a 1% lower rate of gross margin than the firm anticipated in the period.
"However we still expect the gross margin to improve from current levels as we progress through the year as our planned lower stock levels will result in reduced volumes of discounted sales of excess stocks than we saw in the second half of last year," he will tell shareholders.
"The second half will also benefit from lower input prices which should help to stimulate demand."
However, he will also warn that "neither the prevailing economic backdrop nor the weather conditions are helpful to our business".
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Investors pull money from UK equities as government warns of “painful” Budget
The government’s post-election honeymoon period has been short-lived, and investors are shying away from UK equities as a result
By Katie Williams Published
-
Top global fintech companies to invest in
One British fintech hogs the headlines, but there are two top performers in the US. We explain where you should put your money
By David C. Stevenson Published