N Brown to shut 5 stores despite promising quarter

Xavier Trudeau
Juin 20, 2017

Weak footfall has forced N Brown to announce the planned closures of up to five of its loss-making stores across the United Kingdom, despite revenue growth.

Group revenue for the three months to 3 June rose 5% compared to the same period past year, with a strong performance in particular from its ladieswear brands, including Simply Be and JD Williams.

Ladieswear and its Simply Be brand had a very strong period, with good responses to N Brown spring and summer campaigns, particularly JD Williams' "Spring into Summer" and Simply Be's "We Are Curves", the retailer said.

Rival Bonmarche Holdings Plc, which makes women's clothing in sizes 10-28, reported an nearly 40 percent drop in full-year profit, and said the apparel market was hurt by lower demand, Britain's move to leave the European Union and unseasonal weather patterns.

British retail sales posted their biggest quarterly fall in seven years in the first three months of 2017, hurt by rising prices following the Brexit vote, reinforcing views that household spending, the main driver of the United Kingdom economy, was slowing sharply.

Chief executive officer Angela Spindler said: "We are pleased to report a good Q1 performance, with continued momentum across all of our brands and categories".

The Manchester-headquartered group's full-year guidance to investors is unchanged aside from the exceptional costs relating to these store closures. Analysts at Peel Hunt upgraded the stock to a "hold" from "reduce".

The group said today it is closing down five of its Simply Be and Jacamo dual-fascia stores largely due to "weak high street footfall" both current and predicted.

Together, these five stores contributed 5 million pounds to revenue, but accounted for the entire 2 million pounds operating loss of N Brown's store estate in full year 2017, it said.

N Brown expects to take a one-off hit of between £10mln and £14mln in relation to the closures, which should be completed by the end of August.

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