UK digital clothing and footwear retailer N Brown Group has warned it is anticipating “a material reduction in demand” for the remainder of the financial year on the back of the coronavirus outbreak.
The group has rolled out a series of actions to reduce costs and preserve liquidity, including a review of its organisational structure and stopping stock purchases.
In addition, the company said it is executing a reduction in marketing expenditure, stopping and deferring all non-essential CAPEX, and working with HMRC to defer tax and national insurance payments.
“Our objective in relation to all of these actions is to preserve liquidity in the business and allow us to manage the business effectively and prudently through this highly uncertain period. In addition, the group is exploring all options in relation to the Government and Bank of England support packages for business,” it said.
N Brown Group said due to the uncertainty around how Covid-19 would impact the economy, it is “extremely difficult” to quantify the expected impact as reliable and therefore it could not make a reliable and detailed forecast for the financial year ending 27 February 2021.
However, it expects the group’s adjusted profit before tax to be lower than the previously guided range of GBP70-72m (US$82.4m-$84.8m).
It also said it would likely delay the publication of its full-year results due to working restrictions affecting the company and auditors.
“Whilst Covid-19 will have a very significant impact on the group’s business, the board remains confident in N Brown’s proposition and the markets it serves.”