N Brown today reported a 1.5% lift in first-quarter like-for-likes, as it aims to step up its online offer. Here’s what analysts had to say:
Matthew McEachran, N+1 Singer Equity Research
“Overall there is nothing to get too excited about in today’s Q1 update. If anything the figures are a smidge disappointing.
“However, the building blocks and underlying trends (including customers up 4% in power brands) bode well for a much improved trajectory from Q3 (especially vs. soft comps).”
Nick Bubb, independent analyst
“CEO of N Brown, Angela Spindler, has been under some pressure after the disappointing performance of the business last year, but any further disappointment has been avoided today, with the Q1 sales figures (for 13 weeks to May 29th) coming out ahead of last year by 1.5% LFL.
“There are a lot of moving parts in the N Brown group, and as Spindler says ‘although we have had an encouraging start to the year, there remains a lot to do’.”
Kate Calvert, Investec
“While Q1 sales were ahead of consensus, the tone of the statement on gross margin and opex negate this. Management’s actions to modernise the business continue to weigh on the financials.
“While we like N Brown’s market niche and believe it has the potential to become a growth story again, valuation is not compelling enough.
“There are too many moving parts/unknowns, particularly with regard to credit, cost and mix changes, to have enough confidence in forecasts.”
Anusha Couttigane, Conlumino retail consultant
“Online, the usage of mobile devices has risen to account for 57% of all online traffic, while the group is celebrating “industry leading” online conversion of c.5.5%. In fact, 68% of new customer demand was generated online over the period, with Jacamo and Simply Be brands achieving 90% penetration online.
“While N Brown’s fashion fascias typically specialise in solutions for the fuller figure, the retail group is also focusing on driving revenue through its homewares division – a strategy which delivered 20% growth for the period.
“With a more mature target age range, starting at 30-45 years for ‘younger’ brands, N Brown Group is likely to face increasing competition from the likes of Bonmarché. With the value-level rival also set to launch an auto-responsive device site, we could see competition between Bonmarché and some of N Brown’s more senior brands narrowing.”
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