N Brown’s etail lingerie business Figleaves has made a half-year profit for the first time in its history, but the home shopping fashion group faces an uphill battle until the end of the year as consumer confidence deteriorates.
N Brown expects Figleaves, which it acquired last year for £11.5m, to achieve a full-year profit in its next financial year.
The retailer declined to give numbers, but said the first-half profit made was “small”.
Figleaves’ underlying losses were cut to £900,000 in N Brown’s year to February 26 from a £6.4m loss in the 12 months to June 28, 2009.
N Brown notched up a 5.9% increase in pre-tax profit to £44.8m in its first half to August 27. Like-for-likes were up 1.5%.
However, chief executive Alan White said consumer confidence was dampening and expressed caution about the Christmas trading period.
White said N Brown had seen erratic shopping patterns in recent weeks, with sales up 11% last weekend, compared to an 18% slump the previous weekend. In the six weeks to October 8 its like-for-like sales dropped 1.5%.
White said the volatility is making it difficult to predict trading in the run-up to Christmas and he expects promotions to set the tone for the golden quarter.
He said: “There is too much stock in the market as a whole. It’s going to be promotional.”
White said N Brown’s autumn clothing price rises is making it difficult to get cash-strapped consumers spending.
Rival home shopping boss Mark Newton-Jones, chief executive of Shop Direct Group, has also seen erratic patterns and said the last month had been “rocky”.
The retailer, which posted a 5% sales rise over the Christmas period last year, expects growth to be “slimmer” this time round.
N Brown is in advanced discussions to sign five new locations for its Simply Be brand, which opened its first two physical stores over the past month.
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