June 14, 2018 / 6:39 AM / 7 days ago

UK's N Brown looks to close all 20 stores and move online

(Reuters) - British clothing retailer N Brown Group Plc (BWNG.L) said on Thursday it was looking to close all its stores and move entirely online, the latest in a string of chains cutting back their High Street presence due to the tough retail environment.

FILE PHOTO: Shoppers and tourists walk along Oxford Street during the sales in central London, Britain, December 28, 2017. REUTERS/Russell Boyce/File Photo

Many British retailers, including Marks & Spencer (MKS.L) and House of Fraser, are shutting shops in the face of competition from online retailers such as Amazon (AMZN.O), a squeeze on consumer budgets and a change in Britons’ spending habits away from fashion and toward holidays and entertainment.

N Brown, which targets women over 30 and specializes in larger sizes, said it was considering closing its last 20 stores, due to a disappointing number of shoppers.

The move online takes the company back to its roots. After launching in 1859, it used the development of the postal system in Britain to sell goods directly to customers.

“We continue at pace our journey to become a global online retailer... This will underpin our future growth, both in the UK and internationally,” CEO Angela Spindler said.

The company said it was beginning a consultation with staff on closing the stores which it expects to finish by October. If it decides to close all the stores, it expects an exceptional cost of 18 to 22 million pounds ($24-$29 million).

It did not say how many jobs would be affected. The stores generated only about 15 million pounds, or 2 percent of total revenue, and posted a core loss of 3 million pounds.

In the last few weeks, department store group House of Fraser said it needed to close 31 stores to survive, a plan likely to result in as many as 6,000 job losses, while Marks & Spencer said it planned to close more than 100 stores in Britain by 2022.

N Brown reported revenue growth of 0.4 percent in the first quarter, better than the flat revenue it posted in the previous quarter, but much lower than the 5.6 percent rise it posted a year ago.

Online revenue grew 3 percent in the first quarter, with 75 percent of total revenue now generated online, the company said.

The company has been spending heavily on promotions to drive sales and has focused on its core brands - JD Williams, Simply Be and Jacamo - to boost sales and offset lower revenue from its secondary brands.

For example, it re-launched its JD Williams brand, a department store concept offering style for customers over the age of 45.

The company stuck to its full-year expectations on Thursday, but said it may take exceptional costs of 18 million pounds ($24 million) to 22 million pounds if it decided to close all 20 stores.

Shares of N Brown were down 2.8 percent by 0823 GMT.

Reporting by Arathy S Nair and Chris Peters in Bengaluru; Editing by Sunil Nair and Adrian Croft

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