Home shopping giant N Brown is confident that discounting will not shape the golden quarter like it did last Christmas.
N Brown chief executive Alan White told Retail Week: “Last December everyone was slashing prices; with the mild autumn everyone had poor stock and were on full scale Sale by November. We were offering 10%, 20% promotional offers online.
“My expectation is that it will be back to normal [this year]. Our stock’s in good shape. Everyone has been a bit more cautious on that front.”
White said he was “pretty optimistic” about Christmas on the back of a 10.1% sales advance in the six weeks to October 13.
N Brown was one of many retailers such as Asos and SuperGroup which have introduced lower prices over the past year to stimulate sales.
White said the move has worked in some categories such as electricals, where sales jumped 22% in the six months to September 1, however in ladieswear, its highest margin category, he said the volume uplift was not as expected.
Pre-tax profit dipped 4.5% to £42m in its half year to September 1 despite like-for-likes increasing 3.7%. The retailer’s gross margin dipped 1.6% to 53.3%, hit by the online promotions and price cuts.
White admitted: “Perhaps we overdid it slightly and gave margin away without the volume uplift.”
However White said margin was getting “progressively better” and he expected it to improve by 100 to 150 basis points in the second half.
Over the first half, when total sales jumped 4.3% to £379.3m, N Brown’s younger brands were its star performers with Jacamo and Simply Be notching up double digit growth.
N Brown revealed it had made a £1.1m loss against £1.7m sales over the period for the six Simply Be stores - the brand’s first physical presence.
White said he was happy with the performance of the stores, which opened last year, particularly its dual branded Simply Be and Jacamo stores. N Brown will evaluate the performance of the shops after Christmas.
He said: “I’m absolutely convinced that if we build on the things that work, we’ll get there. There’s clear evidence that the stores are helping to build online sales.”
He said sales in the Liverpool area, near one of its stores, were up 14%, compared with an 8% increase in the Northwest as a whole.