N Brown, which missed out on buying the Freemans home shopping business from Sears last year, has highly regarded mail order systems including call centres, warehousing and a nationwide network of couriers who deliver and collect returns of unwanted items.
N Brown now believes these services could be useful to third parties who might be interested in joint ventures or service contracts.
As part of this strategy the group has acquired a 33 per cent stake in a database management company, Synetics Solutions. N Brown will be able to use data manipulation for its own catalogues while also selling the service to outsiders. Talks are taking place with a number of potential customers.
The comments came as N Brown reported a 7.4 per cent increase in underlying profits to pounds 43.3m for the year to February. The figures were in line with expectations and the market also responded to a current trading statement showing sales up by 6 per cent on last year.
With a solid core business and the possibility of leveraging its expertise in deals with e-commerce providers in the fledgling world of interactive television, N Brown will be in demand and could even become a takeover target. The shares rose 18p to 309p yesterday, which on current year profit forecasts of pounds 46m puts the shares on an undemanding forward multiple of 15.
Ashley Thomas of SG Securities says: "N Brown has good opportunities to grow. We have moved from hold to buy."