First half results at N Brown Group plc showed a
fall in sales of 0.6 per cent to £407.3 million which the business says
largely reflects lower sales for its JD Williams brand. During the period to
30 August 2014, the business had moved more of its marketing spend on
paper-based activity to digital and had improved its bad debt performance
via tightened credit policies. These changes it says were at the heart of its
strategy to move the business further away from the mail order model and more
towards its objective of being a multichannel fashion-led company.
The business had re-shaped its marketing programme,
altering the phasing and focus of activities and investment. The later
phasing of activity and spending is more in tune, it says, with how customers
shop now, particularly at seasonal peaks. It re-aligned its marketing spend
from a 50:50 seasonal balance in the past to around 40:60 for the
Spring/Summer versus Autumn/Winter seasons this year.
Spending was reduced by almost a quarter during the
first half and much of this has been redeployed into digital customer
recruitment marketing and TV advertising. This saw growth in active customers
of 3.7 per cent.
The business relaunched JD Williams with new brand
ambassador Lorraine Kelly and saw customer numbers increase by 26 per cent.
Product quality has been improved for the JD Williams range with an upgrading
of fabrics and trims with focus on delivering better value for money.
Online sales accounted for 58 per cent of all sales
in the first half, credited in part to website improvements as well as a
better mobile experience. Its operations function is now working seven days a
week and offering customers a full seven-day delivery service with Sunday as
either next or nominated day. The 8 pm delivery cut off will be moved to 9 pm
and, by Christmas, the business will offer collection and returns from some
5,500 parcel shops across the UK.
Construction work commenced at its Shaw Distribution Centre on a warehouse expansion project with new capacity expected to come on stream early in 2016.
Andrew Higginson, Chairman, said: “In a period of substantial change in our business, lower first half profits are largely attributable to the planned later phasing of our product season and marketing activities as well as the changes we have made to our credit policies. The benefits of re-phasing will not flow through as expected during the second half as a result of the very difficult market conditions across the clothing sector in recent weeks. In re-setting expectations for the full year, the Board believes it is taking full account of these pressures on performance and also giving the management team the time and space it needs to push on with the necessary programme of modernisation which is equipping the business to access faster growth in the future.”
Angela Spindler, Chief Executive, said: “We have stepped up the pace of change in the business designed to unlock the potential value we see in a proposition built around fashion that fits. In modernising the way we operate and the way we go to market, we are focused on: attracting more customers by raising brand awareness and broadening our appeal; building customer loyalty through further product and service improvements, and creating a modern scalable infrastructure so that the business is fit for the future. Despite the negative effects of recent market conditions on performance, I am confident that we are taking the right actions and are making good progress.”
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