The owner of Simply Be and Jacamo issued a profits warning yesterday as it became the latest retailer to blame mild autumn weather for poor trading.
Catalogue and online retailer N Brown now expects full-year pre-tax profits of between £88m and £92m in the year to the end of February, compared with the City’s forecast for a figure of £103m.
Shares fell as the Manchester-based firm also said half-year profits fell 3.2 per cent to £42.7m in the 26 weeks to August 30 as it reorganises its business towards online sales from its traditional mail order model. Last week fashion giant Next said it would be forced to lower its full-year forecasts if the warm autumn weather continued.
Chief executive Angela Spindler said: “In common with a wider clothing sector which has been adversely affected by unseasonably mild autumn temperatures in September and so far in October, our own performance has also been impacted.”
She said the board believed it was prudent to re-set expectations because it was a “transitional year” for the company.
Changes have included the slashing of marketing investment in its catalogues by almost a quarter during the half-year period, which contributed to a drop in sales, particularly in the most recent quarter.
Half-year revenues were down 0.6 per cent at £407.3m, reflecting lower sales at JD Williams ahead of its recent relaunch.
The company added that its online sales grew to 58 per cent of its business in the first half, with its stores accounting for three per cent of revenues. Reacting to the profits warning, brokers at Shore Capital said: “Such an outcome is clearly disappointing, doubly so, given the cross over with the JD Williams re-launch.”
In July, television host Lorraine Kelly became a brand ambassador for its JD Williams business.