N Brown star brand sales rise, Holden and McCall are new ambassadors
Shares in fashion and homewares e-tailer N Brown continued to fall on Thursday, despite the company releasing a positive trading update and news of two new high-profile celebrity ambassadors.
The share price — and therefore the overall market value of the firm — had dropped sharply on Wednesday on news of complications around a legal case. And it fell a further 3%+ after the firm said it had seen a return to growth in the 13 weeks to May 29.
Its first quarter was “in line with expectations” as it saw “good momentum in product revenue” with a 4.6% rise to £106.9 million.
And its five strategic brands of Jacamo, Simply Be, JD Williams, Ambrose Wilson and Home Essentials, grew product revenue by 15.5% to £86.1 million.
Its ‘other brands’ were down 24.6% at £20.8 million and Financial Services revenue was 5.9% lower at £61.8 million, impacted by lower product sales in the previous year. But customer repayment rates were higher. It all meant overall group revenue edged up by only 0.5% to £168.7 million.
As mentioned, the strategic brands that the company owns were the key drivers of its growth during Q1 following a major transformation to focus on these labels over the last two years. Those five brands accounted for 81% of product revenue this time compared to 67% in Q1 2019.
It was also the first quarter of product revenue growth since Q3 FY18.
And the company said Clothing & Footwear sales continued to recover as demand increased 21% compared to the prior period, with own-brand Womenswear up 27% and Menswear own-brand up 25%. Demand for Home & Gift was lower than the prior period as this time last year it had benefited from pandemic-related purchases of garden furniture and personal grooming products.
The company is continuing to invest in marketing to increase awareness of its strategic brands and their customer offer. And this month, it has signed Amanda Holden and Davina McCall as brand ambassadors for JD Williams “to increase consideration for our boutique shopping experience amongst the target audience”.
For the current financial year, the company is still expecting product revenue growth of between 3% and 7% and adjusted EBITDA to be in the range of £93 million to £100 million.
CEO Steve Johnson said: “The strategic transformation initiatives we have enacted over the past two years have now started to deliver product revenue growth, with customers responding well to the new ranges across our core brands.
“We have a number of exciting initiatives in the pipeline and Amanda Holden and Davina McCall [as] the new faces of JD Williams, [will be] leading some innovative new campaigns, which will serve as a rich source of inspiration for our customers.”
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