N Brown Group reports a return to profit amidst declining revenue, signalling strategic wins.
- Profit before tax reached £5.3m, a reversal from a £71.1m loss the previous year.
- Revenue fell by 9.8% to £601m; product revenue showed a 10.6% decline.
- Despite challenging market conditions, a focus on profitable sales prompted strategic changes.
- CEO Steve Johnson remains optimistic about future growth and increased marketing investments.
N Brown Group has reported a significant turnaround in its financial performance for the year ended 2 March, achieving a profit before tax of £5.3 million, a stark improvement from a loss of £71.1 million the year prior. This positive result was primarily driven by a reduction in adjusting items and an intensified focus on profitable sales, despite an overall revenue drop of 9.8% to £601 million, and a product revenue decline of 10.6% amid persistent market challenges.
The company, known for its brands such as Simply Be, JD Williams, and Jacamo, attributed its improved profitability to strategic initiatives including website enhancements and the replatforming of its data capabilities. These initiatives have begun to bear fruit, notably with Jacamo’s website performing exceptionally well and Simply Be’s successful inclusion on the same platform. This strategic shift has allowed the company to deliver transformative change, impacting customer experience positively.
Full-year results indicated a noteworthy 1.5 percentage point rise in the adjusted gross profit margin to 47.7%, with a product margin increase of 1.2 percentage points. This was achieved through a cleaner year-end stock position, a relentless focus on profitable sales, and reduced freight rates. Key product developments included the introduction of JD Williams’ Anthology premium line and Jacamo’s expanded own-brand offerings in smart casual wear, denim, and footwear.
Aiming to build on its current trajectory, N Brown announced plans to scale up its marketing investment by £10 million this financial year, facilitated by cost efficiencies. CEO Steve Johnson expressed a positive outlook toward consumer confidence, citing macro-economic trends such as consumer price index trends favourably below wage growth. “Because we are feeling good about where the business is,” he stated, “we are seeing some macro-economic trends that look a bit more favourable.”
Johnson also highlighted a shift towards more intentional shopping in footwear and sportswear, expressing optimism about the summer performance, especially with improved consumer confidence. The company expects product revenue declines to ease, projecting a return to moderate growth for the full year, underscoring its resilient approach amidst challenging conditions.
N Brown Group’s strategic changes and market adaptability have positioned it well for potential growth despite current economic challenges.
