The decision by N Brown Group to consider closing its store estate is indicative of the challenges multichannel retailers face when looking to expand on to the high street, property advisers and analysts have observed.
In a trading statement on 14 June the retailer announced it was thinking about closing all 20 of its UK stores, many of which are dual-fascia units trading as Jacamo and Simply Be, following disappointing sales and footfall.
Product revenue at N Brown fell 2.8% year on year for the 13 weeks to 2 June, amid a “challenging” market.
One property agent said the closures showed the difficulties etailers encounter when crossing over to the high street: “It’s bit of a reality check for N Brown. Although it isn’t a lot of stores [they are closing] as a long-established player I thought they would have made a better go of it.
“It’s interesting as it says a lot about the dynamics of the multichannel market and who is willing to chuck money at it and not understand the returns.”
The decision is a turnaround for N Brown, which only five months ago had pledged to keep stores open for the foreseeable period despite closing five non-profitable stores in 2017. N Brown has estimated that the store estate closures will cost the firm between £18 and £22m.
Retail analyst Richard Hyman said N Brown may have simply picked the wrong time to try its hand at high street stores: “Hindsight is a wonderful thing. N Brown embraced physical retailing quite late in the game and it probably has some high rents as well. That has probably hastened the decision to shut the stores and they could be haemorrhaging cash.
“Given their size and financial muscle, they could have opened many more stores [when they expanded] this is not a life threatening catastrophic error of judgement, it’s something they have had a go at and has not worked very well.”
Retail analyst Nick Bubb added: “Clearly it never looked convincing as an opportunity – the stores were not in too great shape. It is hard to start a new chain from scratch and the locations they picked were not [all ideal]. The store closures are sad but not surprising. What is a surprise is that trade was so bad in Q1, which was made up with the financial services [side of the business].”