Resilient spending on clothes among older and larger customers has boosted sales at plus-size fashion group N Brown, bucking the dismal trend affecting many British retailers.
The home shopping group shrugged off higher cotton prices and wage inflation in China to report like-for-like sales up 1.6 per cent in the 18 weeks to July 2.
However, in order to drive sales, N Brown, whose brands include Jacamo, Marisota and Oxendales, was forced to use aggressive promotions and discounting, which drove down margins by 0.2 percentage points.
Analysts have attributed the rise in sales to the "grey pound," a resilience in spending among older customers who are less affected by the economic downturn.
"Trading updates today from N Brown and Jacques Vert imply that the 'old grey consumer' is alive and kicking … even if gross margins may be under some pressure from discounting," said Nick Bubb, a retail analyst at Arden Partners.
This year, N Brown warned that its fashion collections had incurred cost increases of 9 per cent due to the rising cotton price and wage inflation in China, which the group countered by increasing its average selling prices by 7 per cent in the first half.
"The provision of credit facilities to our customers is undoubtedly a benefit in these tough economic conditions, and default rates are in line with our expectations," N Brown said.
The Manchester-based group owns a range of catalogue and online retailers, including JD Williams, Fashion World and Gray & Osbourn. In June last year, it acquired Figleaves.com, the online lingerie and underwear specialist, for £11.5-million ($17.83-million); while in September, 2009, it paid £1.6-m for High & Mighty, a retailer of plus-sized men's wear.
Online sales now comprise almost half of N Brown's total sales, with the remainder coming over the telephone or by mail.
"Our core strategy is to target niche customers and products, increasingly through online marketing activities. Online sales now account for 47 per cent of the total, up from 41 per cent last year," the group said.
However, the company plans to open by October two physical stores - in Liverpool and Bury - to promote its female fashion brand Simply Be, which it is also expanding into Germany and the US.
N Brown also sells men's wear, offering sizes as large as XXXXXL, equivalent to a 60-inch waist measurement.