N Brown to Expand Into U.S., Target Heavier Women

N Brown Group Plc, the U.K. owner of the Fashion World and Simply Be catalogs, will expand in the U.S. this year as it targets heavier women in the country, a potential $35 billion market.

The retailer will open a Simply Be Web site in the U.S. in July and deliver 1 million catalogs in August, Chief Executive Officer Alan White said in a phone interview today. The company is also seeking to shift more of its total sales online, where costs are lower and orders larger, he said.

In the U.K., N Brown has about a 5 percent share of the women’s clothing market for sizes 16 and up, and it sees potential abroad, White said. The Simply Be brand was introduced in Germany last year.

“We don’t need to do “x” amount in Year One; we’ll look to slowly but surely build up customers,” in the U.S., White said. “To get started will cost us less than 1 million pounds ($1.54 million).”

Full-year pretax profit excluding one-items climbed 13 percent to 93.1 million pounds as sales advanced 4.2 percent to 690 million pounds, Manchester-based N Brown said in a statement today. Profit on that basis beat analysts’ consensus forecasts by about 6 percent, according to Credit Suisse, one of the company’s brokers.

Net income for the year ended Feb. 27 was little changed at 62.5 million pounds, from 62.1 million pounds a year earlier.

Internet Sales

Sales for the eight weeks to April 24 rose 4.1 percent, with comparable sales up 3.1 percent. This year’s revenue gains will be “relatively modest” as customer recruitment numbers were little changed last fiscal year, White said.

N Brown did 39 percent of its sales over the Internet in the fiscal year, up from 34 percent a year earlier. It wants to make Internet sales half of revenue within two years, White said, with average order sizes on the Web 25 percent larger.

“Every time we bypass a call center, that saves us 75 pence to a pound” with catalog-transaction costs averaging 3 pounds, White said.

The company is also seeking small acquisitions of “niche customers and products,” he said. Current customers’ average age is 57, and the company sells clothing to heavier or taller men and women, and shoes for those with wider feet.

Net borrowings declined by 22 percent to 170.1 million pounds as the company reduced bad customer debt.

N Brown rose 12.6 pence, or 5 percent, the most since September, to close at 265 pence in London. The shares have risen 6.9 percent this year, giving the company a market value of 737.8 million pounds.

In the U.K., N Brown is adding new ranges such as That’s My Style for women in their late 50s, and Williams and Brown, for men over 50.

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