N Brown hands back £80m to investors

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The Independent Online

N Brown, the home shopping retailer aimed at older and larger-sized consumers, is to return £80m to shareholders as it announced an 11 per cent rise in underling sales.

The company, which caters mostly for women, said the move would "improve the efficiency of our balance sheet". N Brown has divested non-core interests while its main business has been revived over the past three years since it started offering more fashionable clothing. Most customers order clothes over size 20 and their average age is 60. The company sells both through catalogues and over the web.

N Brown said it would return 27p a share to investors, equivalent to 9.5 per cent of the existing share capital. The return, if approved by shareholders, will be made through the issue of B shares and a consolidation of the ordinary shares. The scheme will cost the company £900,000.

The company will also tackle its pension fund deficit, making a £15m payment in March and a further £12m over the next three years to eliminate it.

Alan White, the chief executive, said the company retained the capacity for "occasional" bolt-on acquisitions. "We are most keen on organic growth," he said.

N Brown reported that group sales were up 14.2 per cent for the 21 weeks to 20 January and like-for-like sales were 10.8 per cent higher for the period. Mr White said: "You have to be an extremely good value specialist in the retail market these days."

The company is migrating sales from its traditional phone ordering service to its website, which lowers costs and results in higher sales per customer. N Brown has found that internet orders are 25 per cent higher because the website suggests other related products to those placing orders. N Brown shares closed up 10 per cent at 311.5p.