N Brown profits tumble as cost-of-living crisis shrinks online market

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N Brown has reported falling profits and sales as the ongoing inflationary environment and cost-of-living crisis shrinks the online market.

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N Brown reported that adjusted profit before tax was down 82.4% to £4.3m for the period

For the 26 weeks ending August 27, 2022, N Brown reported that adjusted profit before tax was down 82.4% to £4.3m, statutory profit before tax was down 74.6% to £7.2m and adjusted EBITDA had nearly halved to £27.9m.

Group revenues slipped 4.6% to £331.5m. Product revenue was down 5.2% while financial services revenue was down 3.5%.

In terms of current trading, N Brown said that “uncertainty around macro-economic conditions persists and, as such, visibility of trading trends is limited”.

It said product revenue fell 9.4% in September and warned that second-half sales were expected to decline at “a similar rate”.

The retailer said it would “continue to carefully manage cost and margins while planning for ongoing elevated inflation”.

It also noted that it had yet to see “a significant change in the performance of the debtor book as a result of the macro-economic environment” and claimed it was well hedged against the US dollar to December 2024.

As a result of these factors, N Brown said it expected adjusted EBITDA for the full financial year to be “in the region of £60m”.

Chief executive Steve Johnson said: “In a difficult period of weakening consumer confidence, we’ve balanced our objectives between disciplined trading – with a focus on upholding margin – and delivering on our long-term strategy to transform the business.

“Our teams have worked relentlessly to launch Simply Be’s new website, and early indicators give us confidence in the wider benefits for all our customers when we roll this out more widely across our other strategic brands.

“We anticipate continued softness in trading over the second half as macro-economic pressures continue to weigh on consumers, despite government support. We will, therefore, maintain our focus on tightly managing both our costs and margins.

“At the same time, given our ongoing confidence in our strategy and the strength of our balance sheet, we will continue to invest in our digital transformation to deliver sustainable profitable growth.”