N Brown thrives as online sales jump 25%

In the 18 weeks to July 4 turnover was up 5.1 per cent with online sales up 25 per cent. It said it had benefited from the warm weather with its summer apparel lines and footwear selling well and added that its newer brands including Marisota and Jacamo were making strong contributions to the group.

Singer Capital Markets analyst Matthew McEachran said: "The shares deserve a premium rating given the niche nature of the business and the increasing shift towards online sales." However, he warned it "may not be able to shake off fears about the effects of bad debts entirely".

N Brown said although bad debts have reduced gross margin by 1.5 per cent, its pre-tax profit level was being offset by operational cost savings and reduced interest charges.

N Brown has been more cautious in its customer recruitment, which it said had some affect on its level of sales growth but also meant that its rate of debtor growth had slowed from 13 per cent at the end of its last financial year to 8 per cent. It also said it was actively managing debtors who have fallen into arrears and have been seeking alternative payment schemes where possible.

N Brown will continue to enhance its online offer, which chief executive Alan White said could account for about 50 per cent of its total turnover in the next few years.