N Brown, the one-time lumbering mail order giant, has proved that digital transformation does not have to be “all pain, no gain” after a turnaround which has seen the business overturn last year’s £27.1m loss to record a statutory profit of £18.8m in the first half of 2019.
The company, which owns Simply Be and Jacamo, has focused on building its digital presence, applying data to its marketing strategy and focusing on its core UK business.
Last July, N Brown witnessed a 12% uplift in new visitor conversion – with £2m in extra revenue from one platform alone – by optimising and personalising its product messages by implementing a Monetate scheme.
Today, it reported that 84% of its product revenue is now digital as it pursues a transformation of the business. Operating expenses fell 9.5% due to a more targeted approach to marketing and the closure of physical stores.
Earnings rose 4% from £52m to £54.1m in the 26 weeks to August 31 although group revenue fell 5.4% to £432.9m and net debt was up 14.5% to £481.6m.
N Brown chief executive Steve Johnson said: “We announced our new strategy in May to return to sustainable profit growth and we have made good progress over the first half of the year.
“In particular, we have delivered on our strategy of growing digital revenue across Simply Be, JD Williams, Jacamo and Ambrose Wilson.
“This has been achieved by taking a more targeted approach to marketing and customer recruitment. The retail environment remains heavily promotional, but we are concentrating on continuing to improve our customer proposition and ensuring we operate as efficiently as possible, which has led to an increase of 4% in adjusted EBITDA for the period.”
AJ Bell investment director Russ Mould said he believed N Brown had an advantage over many other UK retailers in that it is catering for a specific niche. He added: “It targets people aged over 50 and requiring size 20+. If it can offer good products and a pleasing shopping experience then there is a good chance that its customers will stay loyal.”