N Brown’s entry into the US market could add 15% to 30% to the top line in the medium term, broker Panmure Gordon wrote after a meeting with management.
Panmure analyst Jean Roche said the home shopping group’s August US debut was a “game-changer”, assuming N Brown can snap up a share of between 0.5% and 1% of the £35bn outsize clothing market Stateside. In the UK, N Brown controls 5.5% of the women’s plus-size sector.
Roche said: “In our view, a reasonable sales target could be $175m to $350m [£111.2m to £222.5m]…which is around one sixth to one third of full year 2010 turnover.”
At its interim results in mid-October, N Brown forecast a £1m loss in the US this year, but the breakeven point has moved forward to three years from three-and-a-half.
Panmure reiterated its buy advice on N Brown and has a price target of 320p.