N Brown makes strong progress but sales are still down

N Brown’s results for the 52 weeks to 2 March came with a sub-heading of “continued strategic progress delivering for our customers. Adjusted EBITDA above market expectations and return to profit. Strong balance sheet and liquidity”.

It beat market expectations and that all sounds great, but what it usually means if there’s no mention of higher sales in such a heading is that sales have fallen and so it was in this case. That said, the general story at the owner of the JD Williams, Simply Be and Jacamo brands is clearly one of improvement and a more upbeat outlook for the current financial year.

So let’s look at the numbers. Although the 2022/23 year (FY23) was a 53-week one, on a direct 52-week comparison for FY24, group revenue fell 9.8% to £600.9 million. And product revenue was down a wider 10.6% at £381.2 million. Financial services revenue fell 8.2% to £219.7 million. The company said this reflected “the continued challenging market conditions and a focus on driving profitable sales”.

The product margin was up 1.2ppts, “benefiting from a cleaner year-end stock position, the focus on profitable sales and lower freight rates”.

Adjusted EBITDA was 12.5% lower on that direct 52-week comparison at £47.6 million and the adjusted EBITDA margin fell to 7.9% from 8.2%. But the company said that “despite macro-economic challenges, management actions drove [the] adjusted EBITDA margin up 4ppts from H1 to H2”.

And adjusted profit before tax was up 171.4% (on a 52-week comparison) at £13.3 million. Statutory profit before tax was £5.3 million after a £71.1 million loss in the 53 weeks of the previous year.

The company also said the rate of FY24’s product revenue decline has moderated at the start of FY25, with Q1 declining by a narrower 6%.

This improvement is “expected to continue as the year progresses, and for FY25 the group anticipates product revenue will return to a moderate level of growth, alongside a modest improvement in the rate of decline in financial services revenue and a group gross margin rate consistent with FY24”.

Looking back at the latest year, the company said it boosted customer experience through the launch of Jacamo’s new mobile-first website and the launch of its Product Information Management (PIM) system, which is “fundamental to our marketing strategy”, initially on Simply Be.

There was also a successful launch of new product lines across its strategic brands with JD Williams launching its Anthology premium line, increasing the prominence of its own-brand offering.

Meanwhile Simply Be enriched its third-party offering with the launch of lifestyle sports brand Tala and started offering select lines in Sainsbury’s stores.

And Jacamo enhanced its own-brand offer, expanding across key categories including smart casual, denim, and footwear.

For FY25, JD Williams will be launching its new mobile-first website ahead of the peak season, and to “support sustainable growth”, it’s planning to scale its marketing investment by around £10 million, funded by cost efficiencies.

CEO Steve Johnson said: “We have delivered against our strategic and financial objectives this year. We have kept to our transformation plans, despite the macro-economic backdrop, whilst building resilience through our strong balance sheet, and achieving adjusted EBITDA above market expectations.

“Our customers are now seeing tangible benefits from our transformation, with an enhanced experience being delivered by our new websites and our recently launched Product Information Management system ensuring customers have more detailed product descriptions to inform their purchases.

“Looking ahead, our strong liquidity position allows for continued investment in our strategy, positioning the business for sustainable growth whilst always improving the customer experience.”