N Brown chief executive Angela Spindler has said that stock management will sort the winners from the losers in fashion retail amid tough conditions.

Effective stock management has become more important than ever for fashion retailers as they combat a variety of challenges ranging from unhelpful weather to an apparent trend in consumer spending away from apparel into leisure and other categories, as recently flagged by Next boss Lord Wolfson.

Alongside the fundamental necessity of appealing product, Spindler said: “For me, stock management is the most important thing – it’s what will differentiate winners and losers going forward. Excess stock means drastic discounting for protracted periods.”

So N Brown is recalibrating its attitude towards stock and discounting.

Because of a shift towards online clearance, N Brown closed its 18 clearance stores in the fist half of the last financial year and instead launched a website, Crazy Clearance, to shift old stock. 

The retailer said: “We are developing new online clearance tools, and will be taking the opportunity to leverage these capabilities, and de-risk our balance sheet, by reducing our aged inventory position during the course of full year 2017.”

N Brown’s focus on better management of stock levels is being replicated elsewhere in fashion retail.

Angela spindler

N Brown chief executive Angela Spindler

N Brown boss Angela Spindler has said stock management will separate winners and losers

More widely, fashion has proved tough for retailers lately, with many drawing attention to the issue of stock management.

Debenhams has focused on bringing down stock levels as part of its strategy. Last week the department store group reported that terminal stock, which stood at 2.9%, was in line with its long-term average.

This has helped it to scale back discounting, leading to a 5.1% improvement to the full price sales mix.

Meanwhile, Next’s operational focus has shifted from international hub expansion to improving operational efficiencies.

It listed improving stock level management in hubs, stock replenishment and the rebalancing of stock between hubs and the UK as priorities for the year ahead.

‘A milestone in our transformation’

Spindler described N Brown’s last financial year as “a significant milestone in our transformation”.

She said: “We came back into profit in the second half and our growth is up, which is an important key indicator.”

N Brown reported a sales rise of 3.5% for the year to February 27. However, the bottom line was hit as pre-tax profits fell 7.8%.

The retailer said that this was because of one-off investments in the first half of the year, incurred by its transformation strategy. Second-half pre-tax profits rose 11%, helped by a good Christmas.

The attention being paid to stock management sits alongside big chnages being made to N Brown to turn it into a “truly digital business” as it accelerates away from its roots in mail order.

Spindler said: ”With the business foundations we’ve created, we now have a truly digital business – every process has been changed.

N Brown’s “power brands” – Jacamo, JD Williams and Simply Be – are seen to have the most potential for growth and are therefore more heavily invested in than its secondary brands, and all grew during the year.

Sales of Jacamo and Simply Be rose respectively by 14.6% and 15.6% over the year. JD Williams was up 4.7% over the same period.

Spindler maintained that there is good growth potential for JD Williams but admitted that it might not grow as quickly as Jacamo and Simply Be.

She said: “It [JD Williams] is still blended. It has new contemporary customers and more traditional customers.

“I expect it to deliver good growth but not perhaps at the rates we see for Simply Be and Jacamo. It was in decline for seven years and we are now in growth, I am pleased with that.”

We are now a more immediate fulfilment consumer – we buy in real time, not ahead, and that change in behaviour is significant

Angela Spindler, N Brown

Although Spindler admitted that the fashion retail environment was tough, she said she did not mirror the sentiment of Next boss Lord Wolfson, who said last month that 2016 was likely to be the toughest year since 2008.

Spindler instead singled out two issues – consumer confidence over a possible Brexit and the unpredictable weather mixed with a change in consumer behaviour – which she said were dampening sales.

She said: “We are now a more immediate fulfilment consumer – we buy in real time, not ahead, and that change in behaviour is significant. That would not have made that big of a difference five years ago when people shopped ahead, not for the weather outside their door.”

While 2016 may yet be a tough year, Spindler is confident N Brown can weather the storm as it combines attention to detail, such as stock levels, with its ongoing shift into digital.