Shares in N Brown Group PLC (LON:BWNG) jumped at the open on Tuesday after the plus-size clothing retailer saw its first quarter sales boosted as customers continued to migrate from the high street to its brands’ websites and apps.
Group revenue for the three months to 3 June rose 5% compared to the same period last year, with a strong performance in particular from its ladieswear brands, including Simply Be and JD Williams.
Online sales grew 16% year-on-year and now account for almost three-quarters of total revenues. Of this online traffic, more than half (51%) came from customers using smartphones.
N Brown said, on the whole, it was selling more items for a higher price with the customer returning more frequently.
Five high street stores to be closed
While the internet-based offering is growing, N Brown and its labels are struggling on the high street.
The group said today it is closing down five of its Simply Be and Jacamo dual-fascia stores largely due to “weak high street footfall” both current and predicted.
Those stores contributed £5mln in revenues last year but were responsible for the entire £2mln operating loss recorded by the store estate.
N Brown expects to take a one-off hit of between £10mln and £14mln in relation to the closures, which should be completed by the end of August.
As for the remaining ten Simply Be and Jacamo shops, they recorded “mid-single digit growth” in the opening quarter and the company said it is continuing to improve their performance.
‘Offering is resonating with customers,’ says boss
“We are pleased to report a good Q1 performance, with continued momentum across all of our brands and categories,” said chief executive Angela Spindler.
“Ladieswear and Simply Be in particular had a very strong period, with good responses to our Spring/Summer campaigns, leading to further market share gains.
“Although the outlook for consumer confidence remains uncertain, our offering is resonating with customers.”
Full-year guidance maintained
With a broadly solid first quarter performance, N Brown said it is still on track to meet full-year guidance, although it expects a rise in exceptional costs due to the store closures.
House broker Shore Capital is looking for a pre-tax profit of £81.2mln and earnings per share of 23p, although it does expect sales to slow slightly from the 5% or so it recorded in the first quarter.
Shares surged by 13.4% shortly after the opening bell to 323p.
--Updates for share price and additional info--