There was no shortage of demand for the clothes sold by N Brown last year but the plus-size clothing retailer has reported a sharp drop in profits as it counts the cost of mis-selling payment protection insurance.
The group, whose brands include JD Williams and Jacamo, reported exceptional costs of £25.2m, the bulk of which related to customer re-dress for PPI.
Earlier this month N Brown had warned that exceptional costs would be higher than expected, in part because the deadline for customers to claim compensation in the long-running PPI mis-selling saga is this August. N Brown runs a financial services business offering customers credit to help them pay for their purchases – a holdover from that era of catalogue shopping at home where customers have an account at a particular retailer.
That hurt the bottom line. Revenue rose 2.5 per cent year-on-year to £887.7m in the year to February 25, with pre-tax profit down 23 per cent to £55.6m.
Nevertheless chief executive Angela Spindler said she was pleased with the results which showed they had improved their “trading agility”.
A particular highlight was Ladieswear which delivered the best performance for almost a decade as we gained significant market share.
Revenues from our Power Brands, JD Williams, Simply Be and Jacamo, were up 9.2%, and we successfully turned around the performance of our Traditional segment in the second half. We are also very pleased with the performance of Financial Services, driven by the increasing quality of our customer loan book.
We remain on track to complete the final stages of our systems programme by Summer 2018.
Although it is early in our new financial year, performance so far has been encouraging and in line with our expectations.