UK’s N Brown subdued trading faces challenges

Reuters

British plus-size fashion retailer
N Brown Group Plc expects a hit of about 3 million pounds ($4.31 million) on full-year profit before tax in the new financial year, and said trading so far has been
subdued.
Shares of N Brown, known for its brands SimplyBe and JD Williams, fell as much as 13 percent to 273 pence, the top loser on the FTSE 250 midcap index.
N Brown said sales were lower from a year earlier in financial year 2017, citing a challenging industry backdrop since January month and also a change in marketing
approach.
The Manchester-based company expects full-year product gross margin to be lower by 50 basis points to 150 basis points, hurt by foreign currency headwinds and clearance of aged inventory, among others.
“Low metrics reflect weak sentiment after missing revenues /profit expectations 18 months ago and slower-than-hoped strategic progress,” analysts at N+1 Singer wrote in a note.
The brokerage cut ratings on the stock to “Hold” from “Buy”.
N Brown, which has reduced its range of non-core home and electrical items to focus on fashion clothing, said it adjusted its marketing approach this season, shifting from large TV campaigns to a more phased approach, with increased investment in digital
channels.
The retailer posted a 2 percent drop in underlying profit before tax to 84.5 million pounds for the year ended Feb. 27, in line with expectations.
N Brown Group plc is a British home shopping business based in Manchester, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. It trades as a home shopping retailer under several names, including JD Williams, Jacamo, Simply Be and High and Mighty.
The company focusses each of its brands on a section of the fashion-buying public traditionally ignored or poorly served by the UK high street. The company’s catalogues target women aged 30 and above, with a particular focus on those over 50..
Current brands include Fashion World, Gray & Osbourn, House of Bath, Jacamo, Marisota, Oxendales, Simply Be, JD Williams, Fifty Plus, Williams & Brown and High & Mighty.