N Brown closure plan puts close to 300 jobs at risk

Simply Be and Jacamo owner N Brown mulls closing all stores

Manchester fashion retailer, N Brown says it could close all of its high street stores as it focuses on developing its online presence, putting 240 retail jobs at risk.

The company said it was beginning a consultation with staff on closing the stores which it expects to finish by October.

Online sales were up 3% with revenue now generated from this channel accounting for 75% of total sales, up 5 percentage points year-on-year.

Angela Spindler, the chief executive, said: "This was a challenging period for fashion retail".

"Given continued very disappointing footfall, and despite significant cost efficiencies being achieved, we are today entering into a consultation with store colleagues to consider closing our 20 stores ahead of lease expiry", N Brown said.

Elsewhere, global revenue fell, with U.S. sales down 7.2%, although encouragingly, N Brown's Financial Services business grew by a better than expected 9%.

Last year, the stores generated £15m of sales, about 2% of group revenue. Revenue at JD Williams declined 2 percent, but increased 9.3 percent at Simply Be and 2 percent at Jacamo.

Analyst Darren Shirley at Shore Capital said: "In a challenging quarter for United Kingdom apparel, N Brown's first quarter 2018 trading has been a little better than subdued expectations, with management viewing the performance as "satisfactory... in a challenging period".

The news came as N Brown posted 0.4% growth in revenues for the 13 weeks to 2 June. JD Williams, its biggest brand, caters for over-45s. Against this backdrop and a double-digit comparative in product revenue, I am satisfied with our Q1 performance.

She adds, with the estimated one-off cost to the business in mind, it is not a decision the retailer will take lightly.

The company, whose brands target women aged 30 and above and those of a larger frame, said it expects to take exceptional costs of 18 million pounds ($24 million) to 22 million pounds if it chose to close all 20 stores.

"We view N Brown as being in good shape and well positioned to drive medium term growth through its online, specialist fit model".

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