N Brown will up its ad spend by between £5 million and £6 million in the second half to attract more online customers and increase awareness of its brands.
The home shopping giant wants to attract untapped shoppers to its online and catalogue offers with TV campaigns and improve brand recognition through PR and product placement. As part of the push, N Brown’s new lingerie range, Simply Yours, will be provided for use in the Channel 4 makeover show How To Look Good Naked.
The retailer was bullish about second-half trading after posting interim results ahead of City expectations. Group revenue jumped 13.6 per cent to£290.6 million for the 26 weeks to August 25 and pre-tax profits soared 17.5 per cent to£34.3 million. Current trading was also strong, with like-for-like growth of 11.1 per cent in the six weeks to October 6.
What is being called the silver-surfer effect – the increasing number of older people using the internet – has proved to be a strong growth area for the retailer. Online sales to customers over 65 jumped 63 per cent in the first half, compared with a 36 per cent rise among customers under 45.
Chief executive Alan White said: “We are delighted with these results, which have come from a great deal of investment into better stock levels, increased catalogue pagination, better ranges and quicker delivery times for customers.”
Landsbanki analyst Paul Deacon welcomed a 25 per cent increase in N Brown’s average order values and said: “We think earnings estimates are likely to be subject to upgrades over the next several years.”
White said that the ongoing Royal Mail strikes would not affect delivery times, but that they would hit the delivery of marketing material.
Kaupthing analyst Matthew McEachran said that the effect of the strikes on home shopping specialists more generally was hard to forecast.
“With consumers not needing much in the way of an excuse to spend less, some sort of soft patch may be inevitable if the dispute continues,” he warned.
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