Covid-19: N Brown reports sales decline and launches Home Essentials brand

JD Williams, Simply Be, and Jacamo parent company N Brown has revealed sales dropped by 25% year-on-year in the last six weeks, as the coronavirus pandemic continued to impact consumer spending and retailers’ ability to work at full scale.

It said trading had improved from the levels experienced in early March and the board considers the performance as “creditable in the circumstances”.

Over the last six weeks, sales of home and gift categories were up by 74%, supported by a 1 April launch of the company’s standalone Home Essentials brand, which has its own dedicated website. However, apparel sales across the group were down by 48%.

According to the retail group, more detail will be provided on its homewear brand during a strategic brand review as part of the full-year results announcement scheduled for June. 

N Brown said its financial services business continues to provide consistent streams of revenue, and this area of the organisation is broadly performing at last year’s level. On 14 April, the company followed regulatory guidance to offer customers in financial difficulty as a result of Covid-19 the chance to defer payments for three months – as a result, there is an expectation cash flow will reduce in the period.

Like many retailers of ‘non-essential’ goods, N Brown’s distribution centres continue to operate but at a reduced capacity due to the need to implement more safety measures at these sites.

The company said it has reduced marketing expenditure by 80% as a result of the virus, and 30% of its staff have been furloughed.

N Brown also revealed it has secured new financing arrangements with its long-standing lenders to provide “sufficient liquidity, working capital headroom and covenant flexibility to be able to manage effectively in a challenging trading environment”.

Steve Johnson, N Brown CEO, said: "We are pleased to have secured support from both our banking partners and the government's loan scheme, which help to strengthen our financial position and gives us the flexibility and certainty to manage through this challenging period.

“In addition, the immediate and substantive actions we took at the very outset of this crisis have supported our working capital positively in this period.”