Fashion retailer N Brown has revealed falling sales after a “challenging and highly promotional” Christmas.
Shares in the group dropped 6% as it reported a 1.6% fall in group revenues over the 18 weeks to January 5, with its so-called power brands seeing growth of just 0.1%.
Group revenues were also held back by hefty declines in its traditional, largely mail order brands, which offset progress in online trade.
Manchester-headquartered N Brown said product revenues dropped 6% as sales of its traditional so-called legacy catalogue brands, including Julipa and Premier Man, plunged 22.9% in the quarter.
But sales of its “power brands” – JD Williams, Simply Be and Jacamo – lifted 0.1%.
Online sales of its power brands rose 6.4%, N Brown added.
Overall revenues in the quarter were helped by a 9.7% rise in financial services sales as it cut arrears in the customer credit business.
Steve Johnson, acting chief executive of N Brown, said: “The group delivered robust online power brand growth and a stable margin performance in what was a challenging and highly promotional peak trading period.”
He added: “Trading over the cyber and Christmas periods was relatively consistent and in line with our expectations, with the Group benefiting from a more targeted and efficient approach to its promotional activity.”
The figures come after a tough 2018 for N Brown, which recently lost a long-running dispute with the taxman and saw the abrupt departure of former chief executive Angela Spindler.
N Brown said it is still considering appealing against the VAT ruling in November, which will mean marketing costs are now likely to be between £6 million and £9 million higher from 2020 due to irrecoverable tax.
The firm added it is also upping its cost savings target, looking to trim operating costs by 2% to 4%, against 1% to 3% previously.
N Brown has been repositioning itself as an online retailer to move away from its traditional mail order roots, announcing last June that it would close up to 20 stores.
Online revenues now make up 78.5% of its product revenues, up from 71% a year ago.
Retail analyst John Stevenson at Peel Hunt said N Brown’s headline sales are “slightly disappointing due to significant drops in the traditional and secondary brands”.
“We would like to see a more aggressive approach to the traditional and secondary titles, as we believe asset disposals for non-core catalogues would potentially offer a greater return and focus,” he added.