Introduction

A customer
centric strategy
to drive profitable
digital growth

Highlights

Leading inclusive fashion retailer

N Brown is a top 10 UK clothing & footwear digital retailer. We are size inclusive, focusing on the needs of the underserved customer groups – size 20+ and age 50+. We offer an extensive range of products, predominantly clothing, footwear and homewares, and our Financial Services proposition allows customers to spread the cost of shopping with us.

914.4
Revenue – £m

2018: £922.2m

128.0
Adjusted EBITDA1 £m

2018: £118.6m

83.6
Adjusted pre-tax profit2 £m

2018: £81.6m

-57.5
Statutory (loss)/profit before tax £m

2018: £16.2m

  1. Adjusted EBITDA is defined as operating profit, excluding exceptionals, with depreciation and amortisation added back. The directors believe adjusted EBITDA represents the most appropriate measure of the Group’s underlying trading performance.
  2. Defined as excluding exceptionals and fair value movement on financial instruments.

Chief Executive's statement

Our strategy for the future

The rapidly changing shopping habits of our customers, coupled with a continually challenging consumer environment, emphasises the need for a retail-led strategy which is robustly focused on profitable digital revenue growth.

Steve Johnson, CEO

Steve Johnson Chief Executive

Our Strategy

Focusing on the UK core market
  • Focusing on the UK core market
  • Improving the customer experience
  • Delivering a best in class fit proposition
  • Becoming a truly digital retailer
  • Further delighting our customers
Our Strategy
Focusing on the UK core market

Strategic objective: Maximise the UK core market before leveraging our international opportunity.

Core market

We will focus on the UK

What we are doing:
The UK is our core market and we can do much more to enhance our offering to UK customers every day before focusing time and resource elsewhere. In the UK, the online clothing & footwear market is forecast to grow by 7% per year for the next five years.

We currently have online market shares of 4.0% and 3.2% respectively in our addressable womenswear and menswear markets, giving us plenty of headroom to grow in the UK.

Our strategy
Improving the customer experience

Strategic objective: A crisper, clearer brand proposition for our customers.

Customer experience

We will simplify the business to improve the customer experience

What we are doing:
We will start by simplifying our customer brand proposition. Our brands will be 'fashion' led and there will be an increased focus on the older customer. We currently trade through 11 brands and categorise them under Power Brands, Traditional and Secondary; from FY20 onwards we will not be using these descriptions and will move to 'Womenswear' and 'Menswear'.

Within Womenswear our brands will be Simply Be, for fashionable size 12-32 women; JD Williams, for 45-60-year-old women; and Ambrose Wilson for women 60 and over. Menswear will be the Jacamo brand. Our other brands will remain complementary to Womenswear and Menswear while we finalise our plans and we will provide an update in due course.

Our Strategy
Delivering a best in class fit proposition

Strategic objective: Increase the number of customers, purchase frequency and basket size.

Product

We will deliver better products for our customers

What we are doing:
We will drive further innovation through our market-leading body scanning technology and pioneering 3D design & product development to deliver continued fit improvements in quality products at affordable prices. In addition, we will continue to evolve from design influenced by seasonal trends to key product 'shouts' dropped cohesively in three weekly cycles and thus allow substantially reduced lead times.

Our experience of recent peak trading periods gives us confidence in our ability to buy more promotional product to complement our core ranges and maintain a freshness in our offering. In our Home and Gift proposition, we anticipate a tightened curation, built on a strong central range with more brand specific product.

Our Strategy
Becoming a truly digital retailer

Strategic objective: Improve operating efficiency and customer targeting.

Data

We will trade smarter with Data

What we are doing:
Enhanced use of our rich data has already unlocked operational efficiencies and improved customer insight in our business, but our strategy is underpinned by a further step change in how we harness and use this data.

Substantive investment in new skills and technology platforms, established partnerships with third-party analytics leaders and a “test-and-learn” data culture embedded throughout the organisation are progressing, and there remains significant opportunity to develop these much further.

Our Strategy
Further delighting our customers

Strategic objective: Better engaged colleagues will deliver a better customer experience.

People

We will inspire colleagues toward further delighting our customers

What we are doing:
Our people strategy is focused on creating the right culture and environment which attracts, retains and inspires colleagues to thrive and deliver a great experience for our customers.

As our customers' shopping habits have rapidly changed, we are supporting colleagues to be more customer focused. Changes to our internal reward and performance management processes will reflect this – notably to ensure a more nimble, real-time feedback and appraisal approach.

Key Performance Indicators

Measuring progress against our strategy

Customers

-12.4%
Active customer accounts (m)
-3.2%
JD Williams, Simply Be & Jacamo active customers (m)
-240bps
Growth of our most loyal customers (%)
+50bps
Customer satisfaction rating (%)

Relevance to Strategy

Product

+20bps
Ladieswear market share size 16+ (%)
-20bps
Menswear market share chest 44"+ (%)
+90bps
Group returns rate (rolling 12 months) (%)

Relevance to Strategy

Digital

+7ppts
Digital penetration1 (%)
+10ppts
Digital penetration of new customers (%)
-40bps
Conversion rate (%)
+2ppts
Traffic from mobile devices (%)

Relevance to Strategy

  1. Revenue excluding stores.

Financial Services

+20bps
Arrears rate (>28 days) (%)
-370bps
Provisions rate (%)
-8.9%
New credit recruits (rollers)

Relevance to Strategy

Downloads

Download the full N Brown plc Annual Report & Accounts 2019 or simply choose from the individual sections.

For further information, visit our website www.nbrown.co.uk/investors

N Brown Annual Report & Accounts 2019