Thursday, 24 January, 2019

Simply Be and High & Mighty owner to close all 20 United Kingdom stores

Simply Be and High & Mighty owner to close all 20 United Kingdom stores Simply Be and High & Mighty owner to close all 20 United Kingdom stores
Nellie Chapman | 16 June, 2018, 19:48

Chief executive Angela Spindler noted that the action had "not been taken lightly and we will do all we can to support the colleagues affected during this process".

In a trading update this morning, the company said following "very disappointing footfall", it would focus on online retail, and will enter into a consultation process on whether to close its 20 stores across the United Kingdom ahead of lease expiry.

Today's trading statement revealed that group revenue grew 0.4%, with 75% of its total income generated from online sales.

The company is the latest fashion retailer to announce a raft of store closures in recent months, following New Look, which announced it would close stores in Stockport and Bolton as part of a move to cut shop numbers by 60.

JD Williams' sales fell 2 per cent, while Simply Be and Jacamo's sales rose by 9.3 per cent and 2 per cent respectively. The stores generated GBP15m (US$20.01m) in sales - 2% of group revenue - in 2018 and an EBITDA loss of GBP3m.

Eliminating losses should be positive for the investment case, so today's 6.1% share price decline to 185.6p reflects N Brown's underwhelming first quarter showing, albeit delivered in a tough period for most United Kingdom apparel retailers. "This will underpin our future growth, both in the United Kingdom and internationally".

The company, whose brands target women aged 30 and above and those of a larger frame, said it expects to take exceptional costs of £18m to £22m if it decides to close all 20 stores.

Elsewhere, global revenue fell, with U.S. sales down 7.2%, although encouragingly, N Brown's Financial Services business grew by a better than expected 9%.

Darren Shirley of Shore Capital, meanwhile, views N Brown as being in "good shape" and well-positioned to drive medium term growth through its online, specialist fit model.

The company, however, stuck to its full-year expectations.

N Brown's online revenue has grown 3%, with a 9% increase in Power Brand sales.