NEW N Brown chief executive Angela Spindler is looking to capitalise on a sharp rise in online sales by extending the home shopping group’s network of high street stores to a further 25 key locations throughout the UK.
Speaking as the company unveiled a rise in sales and profits for the first half of the year, Spindler confirmed plans to roll out the dual fascia Simply Be/Jacamo network. New outlets are planned for Leeds and Derby before the end of the year, with others to open in “very targeted” areas where the brands’ key audience of older and larger people is prevalent.
The extension follows the success of seven trial stores which N Brown started opening in 2011. Spindler said those stores had “shown a halo effect on sales” in their catchment, boosting awareness of the brands and offering a collection point for customer orders.
In addition to its own stores, N Brown also launched a “click and collect” service across 3,000 convenience shops earlier this month.
Retailers are increasingly turning to the so-called “multi-channel hub” which has arguably been most successfully deployed by Next, which claims that its high street presence is helping to boost rapidly rising online sales. The trend is also leading to tie-ups such as last month’s agreement between eBay and Argos, which will see the online auction house using Argos stores as collection points.
Spindler said: “I have spent my first three months looking at the business in detail and I am extremely excited by what I have seen.
“As these results demonstrate, the business is performing well, with significant opportunity for growth in the future based around our products, delivery channels and international development.”
E-commerce sales were up 13 per cent during the six months to the end of August, with mobile generating 36 per cent of web traffic. Online sales now account for 56 per cent of N Brown’s home shopping revenues, up from 53 per cent during the same period last year.
Total turnover for the six months rose 8 per cent to £410 million, while pre-tax profits increased from £41.8m to £44.1m.
In a note to investors, analyst Freddie George of Cantor Fitzgerald said the figures “were a little light of expectations” because of an increase in unpaid bills by N Brown customers. The rise in bad debts follows efforts by the company to recruit newer and younger customers.
Investors took this shortfall as an opportunity to cash in following a strong 12 months in which N Brown shares have risen by more than 80 per cent. The stock fell more than 6 per cent yesterday, shedding xx to finish at xx.
However, others such as Mark Photiades at N+1 Singer were more positive.
“The investment case remains compelling given the niche nature of the business, positive demographic/customer trends, international opportunities and the increasing sales shift online,” he said, adding that Spindler was a “solid successor” to former chief executive Alan White.
Spindler took over from White in July, having previously been chief executive of The Original Shoe Factory Shop since 2009. White retired after 25 years with N Brown, including the final ten as chief executive.