Frasers Group takes stake in retailer N Brown

UK fashion industry

Sports Direct’s owner Frasers Group has snapped up a 4.54 per cent stake in N Brown, the online retailer behind brands including Jacamo and JD Williams.

The purchase, disclosed in a stock market filing yesterday, makes Frasers the sixth-largest N Brown shareholder and is certain to raise questions about the company’s intentions.

In addition to Sports Direct, the giant retailer founded 40 years ago by Mike Ashley, Frasers owns a string of other high street names, including House of Fraser, Game, Jack Wills and Evans Cycles.

N Brown, based in Manchester, has refashioned itself into a digital and clothing retailer but has endured a big fall in its profits and share price as consumers facing a cost of living squeeze cut back on spending.

The company, which also owns the Simply Be brand aimed at young women, said in a statement: “We are always pleased to welcome new shareholders to the group as we continue to progress our digital transformation strategy to deliver long-term sustainable profitable growth.” N Brown declined to comment further.

N Brown is 40 per cent-owned by Lord Alliance, but other large shareholdings mean that the family speaks for more than 50 per cent of the company, leading one analyst to say: “N Brown looks pretty locked-up from a control point of view.”

It was founded in 1859 by James David Williams and was one of Britain’s first catalogue firms delivering directly to customers. Last week, N Brown blamed the cost of living squeeze after it posted a 74.6 per cent slide in pre-tax profits to £7.2 million in the six months to the end of August. Revenue fell 4.6 per cent to £331.5 million.

Steve Johnson, chief executive, said the company expected sales to continue falling over the next few months. N Brown, which has raised prices to offset higher costs, has been investing heavily in digital operations. The Jacamo menswear brand will get a new website in early 2023.

The company’s shares have tumbled almost 50 per cent this year, but ticked up 2p, or 9.5 per cent, on yesterday’s news to close at 23½p. The company has a market value of about £110 million.

Last month, Ashley, who owns 69.1 per cent of Frasers, stepped down from the board, having already handed over the running of the group to his son-in-law Michael Murray earlier this year. Murray has been the driving force behind Frasers’ “elevation” strategy to refurbish the group’s vast store estate and woo more upmarket brands into letting the company stock their products.

Frasers has a long track record of being interested in distressed businesses and when the City rumour mill suggests a retailer might be for sale, the Frasers name is never far from being linked as a possible buyer.

In June it bought Missguided out of administration for £20 million, and raised its stake in Hugo Boss, the German fashion company. Other recent purchases include I Saw It First and the Studio Retail Group. Frasers is also stalking struggling retailers in Australia. Despite Frasers’ extensive retail interests it does not have any trading or supply relationship with N Brown.