Closure of store portfolio puts 240 jobs in jeopardy at N Brown
Decision after weak high street footfall
RETAILER N Brown is set to close 20 Simply Be, Jacamo and High & Mighty stores, putting around 240 jobs in doubt.
The sites include the Simply Be/Jacamo store in Sheffield’s Meadowhall and the High & Mighty store in Leeds city centre. The Simply Be/Jacamo store in the White Rose shopping centre in Leeds closed earlier this month when its lease expired.
The group, which also owns online retailer JD Williams, entered into a consultation with staff on Thursday, saying that weak footfall on the high street means it has to close stores. The consultation concerns 12 dual-brand Simply Be and Jacamo outlets, as well as eight High and Mighty stores.
N Brown expects to incur a one-off 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.”
Trade Union Usdaw said that around 240 retail jobs are at risk of redundancy, with 15 head office jobs and 35 distribution roles at Duke Mill in Shaw impacted.
Michelle Byrne, Usdaw area organiser, said: “This announcement is a real shock for staff and we are providing our members with the support they need at this very difficult time.
“Usdaw will enter into consultation talks with the company towards the end of the month when we will interrogate the business case for the proposed store closures. Our priority is to save jobs.”
For the 13 weeks to June 2, N Brown’s revenue from its retail brands fell 2.8 per cent.
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.
N Brown’s financial services revenue was up 9 per cent and group revenue edged up 0.4 per cent.
Online sales, which generate 75 per cent of N Brown’s revenue, rose 3 per cent.
Analyst Darren Shirley at Shore Capital said: “In a challenging quarter for UK apparel, N Brown’s first quarter 2018 trading has been a little better than subdued expectations, with management viewing the performance as ‘satisfactory… in a challenging period’.
“Total group revenue grew 0.4 per cent (consensus -0.7 per cent), with product sales down 2.8 per cent (consensus -3.4 per cent) and Financial Services up 9.0 per cent (consensus +5.7 per cent).
“Given ongoing high street pressures, consultation has begun to consider closing the Group’s 20-store estate, which contributed a £3m EBITDA loss in 2018.
“We view N Brown as being in good shape and well positioned to drive medium-term growth through its online, specialist fit model.”
Analysts at N+1 Singer said in a note: “Today’s first quarter update is solid in context with the dire conditions for the first part of the quarter, including Easter.
“In terms of the P&L, marketing spend was held back until conditions change and performance in Financial Services has been strong. The drag from former Fifty Plus customer migration is yet to wash through but they are optimistic about the measures to resolve this through the course of the year.”