The digital transformation at N Brown Group which included closing down its House of Bath subsidiary, rather than selling it, and shuttering all of its retail stores, saw it reduce catalogue volumes and customer recruitment spend on its once core ‘traditional segment’, and steer customers toward buying purely online, has dented its performance. Whilst revenues rose during the six months to September 1st by 1 per cent to £457.8 million, exceptional charges led to a pre-tax loss of £27.1 million. Bolstered by its financial services arm where revenues rose by 12.7 per cent, elsewhere performance was less rosy. JD Williams product revenue was down by 3.1 per cent and there was, understandably, a marked decline in offline sales which are attributable to its moving investment from customer recruitment. At Figleaves there was some growth led by a new management team following years of under-performance. International performance had also faltered with revenue dropping by 7.9 per cent to £15.3 million as customer recruitment marketing expenditure was migrated from offline to online channels.
Steve Johnson, chief executive of the group’s financial services arm and currently acting as interim CEO for the wider business, following the abrupt departure of Angela Spindler, said: “The Group’s adjusted profit was in line with our expectations as we benefited from growth in our online ‘power brands’ and financial services, along with improved marketing efficiency. We were however disappointed with our wider product performance which was impacted by the decline of our legacy offline business and challenging market conditions. Going forward we expect offline sales to continue to fall as we focus on online ‘power brand’ growth.”
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