N Brown blames Brexit nerves for 'subdued' start to yearComments Off on N Brown blames Brexit nerves for 'subdued' start to year
N Brown, the plus-size retailer behind the Simply Be and Jacamo brands, has said uncertainty over a possible Brexit was partly to blame for a “subdued” start to its new financial year.
“Uncertainty has knocked consumer confidence and appetite for spending and I think that will continue to be the case until June, depending on what happens,” chief executive Angela Spindler said.
Older customers, such as shoppers at JD Williams, its over-50s brand fronted by TV presenter Lorraine Kelly, are particularly affected by the Brexit debate, she added.
Britain goes to the polls to vote on the future of the country’s membership of the European Union on June 23.
N Brown shares plunged as much as 15%, after the update, which Spindler also pinned on poor weather. The shares were last down 41.2p at 273.6p.
A warning of a possible £3 million hit to profit from currency headwinds also took its toll.
For its year ended February 27, N Brown reported revenue up 3.5% to £866.2 million and underlying pretax profit down 2% to £84.5 million, in line with expectations.
Spindler said the benefits of its transformation plan were starting to show. N Brown has been attempting to switch from a mainly mail-order business to become a “digital-first” retailer and higlighted an increase in online revenue (15% higher year-on-year) and online penetration (up six percentage points to 65%).
The “icing on the cake”, a major overhaul of IT systems was on track, she added, though chairman Andrew Higginson, flagged potential “bumps in the road” given the scale of the task.
Peel Hunt downgraded the stock from “hold” to “reduce”, saying “we have little confidence that the business will show meaningful traction… noting better recovery opportunities elsewhere”.