270 jobs could go as stores face axe
MANCHESTER-BASED multi-brand retail group N Brown is set to close 20 stores, putting 270 jobs in doubt.
The group, which owns JD Williams and Simply Be, entered into a consultation with staff on Thursday, saying that weak footfall on the high street meant it had to close stores.
The consultation concerns 12 dualbrand Simply Be and Jacamo outlets – including ones in the Arndale Centre and The Rock Bury – as well as eight High and Mighty stores.
The company expects to incur a oneoff cash cost of between £18m and £22m if it closes all 20 stores.
The outlets affected will be shut ahead of their lease expiry date and bring in around 2 per cent of N Brown’s revenues, generating £15m in the 2018 financial year.
Angela Spindler, N Brown’s chief executive, said: “In line with our online strategy, and given continued weak high street footfall, we have today commenced a consultation process with colleagues over the future of our small store estate.
“This action has not been taken lightly and we will do all we can to support the colleagues affected during this process.”
“We continue at pace our journey to become a global online retailer, uniquely delivering fashion that fits. This will underpin our future growth, both in the UK and Internationally.”
For the 13 weeks to June 2, N Brown’s revenue from its retail brands fell 2.8 per cent.
JD Williams’ sales fell 2pc, while Simply Be and Jacamo’s sales rose by 9.3pc and 2pc respectively.
Online sales, which generate 75pc of N Brown’s revenue, grew three per cent.
Russ Mould, investment director at Salford-based AJ Bell, said: “News that fashion retailer N Brown is thinking about shutting all of its retail stores sounds dramatic, but its physical shops only account for 2pc of group revenue.
“It’s a sign of changing times that retailers are brave enough to reshape their business to match how consumers buy goods today and not feel compelled to keep ailing stores alive simply because that channel is traditionally how items were sold in the past. It seems inevitable that many other retailers will follow suit in time.
“To put the situation in context, N Brown generates 75pc of its sales online and three quarters of these transactions are made via mobile devices.
“The company makes the remainder of its money in areas like customer credit.
“If few people are visiting stores, why keep them open?
“N Brown only has 20 stores and while shutting them may sadly cause job losses, it could be a positive decision for the business over the long term.”