Fashion retailer continues to reposition itself as an online business
Companies: N Brown Group
UK fashion retailer N Brown has announced that it is closing five of its loss-making stores as it continues to reposition itself as an online focused business.
In a trading update for the second quarter of the year, N Brown weak footfall meant it was going to shut the Jacamo/Simply Be stores.
The decline in physical retail sales was offset by a 16% jump in online sales, which now accounts for almost a 3/4 of total revenue. Just over half of its online traffic is on mobile, mirroring trends seen at other online fashion retailers.
Investors welcomed the news with shares opening up nearly 14% early on Tuesday before falling back to around 8% above Monday's close shortly afterwards.
The Group said its Ladieswear was the strongest division with revenues up 13.5% YoY, helping offset a 4.9% drop in its financial services arm which provides credit for customers.
CEO Angela Spindler said the firm was pleased with the results, adding that there was momentum across all brands and categories, with Ladieswear and Simply Be enjoying particularly strong growth.
Regarding the store closures, she said:
"As a result of ongoing weak footfall in some locations, and with a clear focus on driving financial returns across all areas of our business, we will be closing up to five loss-making stores.
Although the outlook for consumer confidence remains uncertain, our offering is resonating with customers. At this early stage in the financial year, trading is on track to meet our expectations. We continue to invest in our customer proposition and remain very confident in our future growth prospects."
The Group also said it was making progress upgrading its core web platform and financial services systems, with all brands on track to be "re-platformed" by the end of Summer 18'.