While the etail era has made online outfitter Asos a share price star, another retailer well placed to benefit from changing shopper habits has been overlooked.
Home shopping giant N Brown’s shares have been flat over the past few months and the business’s £819m capitalisation is less than half that of Asos. But N Brown, which issues full-year numbers on Tuesday, has plenty going for it.
In the first half, N Brown posted pre-tax profits of £42.3m on sales of £349.7m, dwarfing Asos’s £7m on £140m. Although its heritage is in catalogues, N Brown has been adapting - when it last updated in January online accounted for 47% of total sales.
Asos is growing at phenomenal speed - especially overseas - but N Brown has been showing a clean pair of heels too with the establishment of international operations in Germany and, potentially of most interest, the US.
Unlike Asos, whose young fashion prominence gives it a little extra share price sex appeal, N Brown could hardly be described as glamorous.
It prefers instead to quietly serve a broader customer demographic and more specialist markets such as the plus-sized, for whom it supplies what much-missed analyst Richard Ratner used to call “Billy Smart” ranges of big tops and comfy trousers.
But that is a base of customers worth having and whose numbers are growing, and N Brown has been able to improve margins and - vital in home shopping - keep bad debt under control.
N Brown had a choppy Christmas. The snow put shoppers off buying, worried that orders would be late, and the mail backlog meant delays in the distribution of catalogues and customer statements.
But N Brown’s prelims should meet expectations. The retailer may not be the most fashionable but it is usually reliable - a characteristic that should be in demand in volatile trading conditions.
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