N Brown has released its figures for the last 6 months, which are the first since it announced its move to become a purely online retailer.
The Manchester group saw a “significant decline” in offline sales during the period and reduced dividends by 50%.
“Whereas much progress has been made transforming the business into an online retailer, we have not yet achieved the growth in product or international that we would have hoped for and have decided to rebase the dividend to a more sustainable level from which we will seek to grow,” explained chairman Matt Davies.
“Over three-quarters of our product revenue is now online and we have industry leading expertise in fashion that fits. This is supported by a strong financial services business. Our goal of becoming a world class digital retailer remains unchanged.”
So far it has closed 20 stores, which generated £6.9m and a loss of £1m during the period. Product revenue including stores was down 3.7% to £311.4m.
“The Group’s adjusted profit was in line with our expectations as we benefited from growth in our online Power Brands (JD Williams, Simply Be and Jacamo) and Financial Services, along with improved marketing efficiency. We were however disappointed with our wider product performance which was impacted by the ongoing decline of our legacy offline business and challenging market conditions,” added chief executive Steve Johnson.
“Going forward we expect offline sales to continue to fall as we focus on online Power Brand growth. While this will hold back revenue in the short term, there are opportunities to drive profit particularly through improved efficiency, as the business further shifts online, and we accelerate the use of analytics to increase returns on our promotional spend.”
