N Brown's style impresses City

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The Independent Online
With its slightly old-fashioned name and product lines which include size 26 dresses, the mail order group N Brown has often been regarded as something of a stock market oddity. The fact that Sir David Alliance, the Coats Viyella chairman, and his family control 40 per cent of the group has also give the impression that it was little more than his "second company". The last year has changed all that.

Last December's pounds 1.1bn bid for Littlewoods in conjunction with Iceland, gave notice that N Brown was now a force to be reckoned with. It also showed the company's management that it had the backing of the City. Analysts savaged Iceland's lofty ambitions but supported N Brown's. The Manchester- based group has developed into a pounds 600m business still firing on all cylinders.

The latest set of figures were again deeply impressive. Pre-tax profits rose by 27.4 per cent to pounds 12.6m in the six months to the end of August. The second half has also started well.

Every one of the group's mail order catalogues improved sales and profits in the period, while the Sator acquisition, picked up in May for pounds 6m, contributed pounds 200,000.

Though N Brown's core customer remains over 50, it has been moving more to attract the 30- to 40-year-old shopper. Catalogues such as Classic Combination and Fashion World, which were launched two years ago, are expected to achieve sales of around pounds 50m in the full year, almost 20 per cent of group sales.

A new telephone call centre is being opened in Bury and the possibility of telephone operators working from home is being explored. N Brown is also moving to take more control of the distribution end of the business. It aims to establish a network of 1,200 couriers across the country. These private individuals will deliver products, pick up returns and help the company develop a closer relationship with the customer.

N Brown shares have trebled in five years and closed 22p higher at 421p yesterday. With full-year forecasts of pounds 36.5m they trade on a forward rating of 25. Even for a company of this quality, that is pretty demanding for a new purchase but the shares are worth holding.