N Brown suffers stock shortages as revenue declines

N Brown said it was suffering stock delays due to a shortage of shipping containers as the home shopping fashion group reported a revenue drop in the third quarter.

Group revenue for the 18 weeks to 2 January fell 8.8%, N Brown said in an update. Sales of core brands such as JD Williams and Jacamo fell 1.4% and revenue from other brands such as Premier Man and High & Mighty fell 26.1%.

The company's shares fell more than 15% in early trading and were down 10.2% to 66.7p at 08:34 GMT.

N Brown said it was trading in line with expectations and forecast adjusted earning between £84m and £86m compared with £106.7m a year earlier. The company had suspended financial guidance earlier in the Covid-19 crisis.

The company said it was experiencing delays of two to three weeks for many of its stock deliveries because of a lack of sea containers and cost pressure in its supply chain. Containers have been in short supply in Asia after demand rebounded following the first Covid-19 lockdowns, which has also contributed to congestion at UK ports.

N Brown said: "We are working through the operational challenges which this presents us and looking to minimise the impact on customers."

The company has been overhauling its business during the Covid-19 crisis to shift sales online and away from catalogues. N Brown raised £10m in November to cut debt and invest in its digital sales platform after reporting a 25% drop in annual profit. Annual capital spending will be higher than expected at about £23m.

Product revenue improved in the third quarter, dropping 8.9% compared with a 29% decline in the first quarter and a 12% fall in the second quarter. Non-fashion items such as computers and gaming sold strongly. Financial services revenue fell 8.3% compared with 15.8% in the second quarter and revenue collection was in line with the year before.

Chief Executive Steve Johnson said: "We continue to move through the acceleration phase of our strategy, simplifying and strengthening our core brand proposition whilst improving our digital capabilities. This is generating continued momentum within the business, despite the difficult macroeconomic backdrop."