LONDON (ShareCast) - (Sharecast News) - N Brown has secured a fresh £50m loan facility as sales continued to be buffeted by the Covid-19 pandemic, the online retailer announced on Tuesday.
N Brown said that although trading had improved from the "sudden and significant decline" experienced in March, product sales were still 25% lower over the last six weeks. Within that, the home and gift category saw a 74% surge in sales, while in apparel they slumped 48%. "The board regards this performance as creditable in the circumstances," it said.

In the financial services business, cash collections had "performed well" and were broadly in line with the prior year. N Brown has, however, started offering three-month holiday payments for customers struggling financially. "Consequently, we expect cash collection to trade lower over the coming months," it said.

As well as updating on trading, N Brown also announced a three-year term loan facility of up to £50m, under the government's Coronavirus Large Business Interruption Loan Scheme.

Steve Johnson, chief executive, said the loan helped "strengthen our financial position and gives us the flexibility and certainty to manage through this challenging period".

The Manchester-based firm, which specialises in plus size and older customers, will not pay dividends while the facility remains in place, and does not expect to declare one for the 2021 financial year.

Johnson added: "In what remains a very uncertain environment, we have been balancing our number one priority of looking after our colleagues with a commitment to serving our loyal customers while ensuring the business has the resilience to navigate the various changes we are facing."

John Stevenson, analyst at Peel Hunt, said: "N Brown's update confirms a strengthened financial position, with access to CBILS and a change in securitisation requirements, meaning that a Covid-19 collection holiday and disruption do not impact N Brown's ability to draw down on the securitisation.

"The net effect is that N Brown looks well set to weather the current storm."

Clive Black, analyst at Shore Capital, said full-year profits for 2021 were likely to be "materially" lower, though poor visibility and no company guidance means Shore has withdrawn its forecasts.

But he added: "In very difficult circumstances, N Brown has shown considerable agility, capability and ambition, to our minds, in coping with new working practices, servicing those customers still shopping, cutting costs and conserving cash."

As at 1115 BST, shares in N Brown were ahead 10% at 20.65p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE