N Brown Group revenue for the year 4 March 2023 fell 5.3% to £677.5m, reflective of challenges with online market conditions.
The company reported that product revenue declined 6.9%, with strategic brands down 5.3%. Lower retail sales, net of higher customer credit penetration, led to lower financial services revenue, down 2.4%.
Chief executive, Steve Johnson said: “We have remained adaptable to the trading environment which became more challenging during the year, as inflation impacted both our customers and our cost base. Although volumes softened, we maintained a disciplined approach to trading, with a particular focus on upholding margin despite a promotional backdrop.
“We continued to make strategic progress despite these challenges, increasing investment during the year, and we successfully launched our new mobile-first website for Simply Be. I would like to thank every single one of our colleagues for their role in achieving this progress, through their commitment to serving our customers and supporting our vision of championing inclusion.”
Overview of N Brown Group FY23 results:
- Adjusted EBITDA fell to £57.3m from £95m the prior year
- Adjusted profit before tax narrowed to £7.5m from £43.1m
- Operating costs reduced by £2m, with volume-related savings more than offsetting £15m of inflationary pressures
- Returns rates, and clothing and home mix returned to pre-pandemic norms by H2 FY23
‘Weaker consumer confidence’ is expected to continue
The company stated that the previously projected decline in product revenue, which was down 17.8% year-on-year in the fourth quarter of FY23, has continued into the first quarter, primarily due to poor early spring weather.
Johnson added: “We are expecting the weaker consumer confidence to continue weighing on our performance before we see a return to growth and are therefore keeping tight control of costs.”
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N Brown acknowledges the persisting challenges of a high inflationary environment and low consumer confidence throughout FY24. They anticipate a decline in full-year product revenue at a slightly improved rate compared to FY23.
Regarding FS revenue, the company expects a slightly more unfavourable decline rate than the previous year, specifically around 4.3%. The FS gross margin rate is anticipated to be 49.3%, with the adjusted EBITDA margin expected to be approximately 1ppt lower than the prior year.
Looking ahead, N Brown is focused on “transformational priorities” and wants to improve its bottom line by moving further into clothing and has launched a new online mobile app Simply Be, with more investment to come in FY24. It plans to prioritise new websites for Jacamo, JD Williams and the delivery of a new FS technology platform.