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April 27 (Reuters) - British plus-size fashion retailer N Brown Group Plc posted a 2.5 percent rise in full-year revenue due to strong demand for its women's clothing and solid online sales, helping it ride out a tough retail environment.
But echoing sentiments in the sector, N Brown, whose brands target women aged 30 and above, and those of a larger frame, warned that economic conditions for retail would remain challenging this year.
Total revenue grew 2.5 percent to 887.7 million pounds ($1.14 billion) last year. Sales of its women's brands, which include Jacamo and Simply Be, rose 4.2 percent to 256.5 million pounds, its best performance in that division since 2008, it said.
Online sales rose 10 percent and accounted for 69 percent of full-year group revenue.
N Brown has reduced its range of household and electrical items to focus on fashion in recent years, and is moving away from catalogues to online.
Shares in the company were up 6.2 percent at 240.5 pence at 0817 GMT, among the best performers on the FTSE small caps index.
But the company said the macro-economic backdrop remained challenging for retail.
"This manifests itself in our cost prices through inflation, particularly in fuel, our product costs as a result of exchange rate changes, and the disposable income of our customers," the company said.
Rising inflation and muted wage growth following Britain's vote to leave the European Union last June is forcing many consumers to rein in their spending.
British retail sales posted their biggest quarterly fall in seven years in the first three months of 2017, hurt by rising prices following last year's Brexit vote and reinforcing most economists' view that household spending, the main driver of the UK economy, is slowing sharply.
Last month clothing retailer Next said it was "extremely cautious" about prospects in 2017.
It reported a 23 percent drop in annual statutory profit before tax and proposed a final dividend unchanged from the previous year at 8.56 pence. ($1 = 0.7764 pounds) (Reporting by Rahul B in Bengaluru; editing by Jason Neely and Susan Thomas)