Simply Be propels N Brown upwards, announces Zalando deal

By

Sandra Halliday

Published
Jan 23, 2018

“Good performance in a challenging market”. That was the theme of N Brown’s trading update on Tuesday as the owner of the JD Williams, Simply Be and Jacamo brands reported higher sales, surging turnover in the US and a new Zalando partnership.

That last development comes after the firm said it’s pleased with its progress on trading partnerships, which are “one of our key future growth levers.” The new Zalando deal is for Simply Be and Jacamo and sees them being made available through Zalando in 15 countries.

So, lots of big news for the online-to-stores retailer that’s clearly beating the bleak backdrop at present, even if not every part of the business is firing as strongly as the rest of it and margins have taken a hit from promotional spending. Overall product revenue was up 2.7% in Q3 (the 16 weeks to January 6), but individual performances varied widely within that figure.

POWER BRANDS AND INTERNATIONAL 

Revenue at the three Power Brands, JD Williams, Simply Be, and Jacamo, was up 7.3%, and online revenue rose 9%. Admittedly, 9% wasn’t exactly a market-beating performance, but it was a respectable one. 

Meanwhile Secondary brand revenue fell 8.4%, while the Traditional segment rose 3.9%. Financial services revenue (the money it earns from selling goods on credit terms) rose 4.6%. Total active customers on a 12-month rolling basis rose 4.7% and the company kept its profit expectation unchanged.

Interestingly for a business seen as being most focused on the UK, its international ops are booming and the US returned to growth with revenue soaring 22% currency-neutral, or 19% on a reported basis.

The new US marketing strategy, including strong influencer marketing, is “working well” and N Brown expects this performance to accelerate. It’s also on track to go live with its Global Ship Anywhere by the end of this financial year, which further underpins future international growth, while that Zalando deal will be key too.

CEO Angela Spindler said she was “pleased” with the performance, even though that overall 2.7% product sales growth was lower than the 5.9% achieved in the same period last year.

She also said the business enjoyed “another record-breaking Christmas”, which is good news in a market that was tough for many of the firm’s retail peers.

WOMENSWEAR AND MENSWEAR

Across the quarter as a whole, plus-size label Simply Be was the “standout brand” with a 14.5% sales rise as the company invested in promotional activity across its labels.

It was Simply Be that propelled the Power Brands to their more-than-7% increase as the JD Williams label that targets an older female customer was up only 3%, while Jacamo menswear rose 4.6%.

But menswear did well as a whole with a 4.1% rise across the portfolio, beating womenswear’s smaller 0.7% increase. Footwear/accessories also did well with a 9.6% surge.

Womenswear’s weaker rise was partly a reflection of the firm’s Secondary and Traditional segments making a lesser contribution. But in the Power Brands segment, womenswear is clearly doing well. Simply Be outperformed as we’ve seen and the firm also said the relaunch of the JD Williams brand was a success. Its new customer numbers were up 12% and it saw “very positive reactions from existing JD Williams customers.” 

UPS AND DOWNS

Not that everything has gone smoothly. In line with its previously announced strategy of brand simplification, this season Fifty Plus brand customers received the JD Williams marketing program. 

This had “mixed success due to the more traditional fashion preferences of some of these customers” and  impacted overall active customer metrics and womenswear performance. 

And what about those Secondary brands that saw lower sales? The largest brand here, Fashion World, was down in high-single-digits as N Brown diverted marketing investment into its Power Brands. 

Figleaves revenue was down “as expected” with the brand part-way through its turnaround led by its new management team. But the company said it’s still confident in the long-term success of this business. The growth in the Traditional Segment was driven by the Ambrose Wilson brand, continuing the positive trend reported in the first half.