N Brown says Alliance exit won't mean stake sale
LONDON (Reuters) - Home-shopping group N Brown (BWNG.L) said decisions by its chairman to stand down after 44 years and his brother to retire as a non-executive director did not mean they planned to sell their family's combined 47 percent stake any time soon.
The Manchester, north west England, based firm, which targets older and larger shoppers, said on Tuesday David Alliance would step down as chairman on September 1 and be replaced by Andrew Higginson, a former executive director of Tesco (TSCO.L), Britain's biggest retailer.
David Alliance will remain as a non-executive director but his brother, Nigel, a director since 1969, will retire from the board at the end of the year.
"They will remain as major shareholders ... Very much their view is nothing changes," Chief Executive Alan White told Reuters, though he did add the caveat: "Nothing is forever."
White, CEO since 2002, has also informed the board he plans to retire from the retailer in the second half of 2013. He plans to stay until a new CEO is appointed and then build a portfolio of non-executive directorships.
"Once the chairman decided to step down and we started talking to new (possible) chairmen I had to be honest about my timescale," he said, adding there were internal as well as external candidates for his job.
When White joined the firm as finance director in 1985 its pretax profit was under 5 million pounds. In the 2011-12 year it made 97 million pounds.
"We have come a long way from the Manchester mail order business I bought in 1963 and today more than half our sales are online," said David Alliance.
The management changes were announced ahead of N Brown's annual shareholders' meeting. The firm, whose brands include Simply Be, Jacamo and Marisota, also updated on current trading.
It said like-for-like sales rose 1.9 percent in the 17 weeks to June 30.
Although that was ahead of growth of 0.6 percent in the eight weeks to April 28 the mix of sales meant gross margin was 1 percentage point lower than the firm had anticipated.
Ladieswear revenue was lower than expected, mainly the result of wet weather, which depressed sales of summer clothing.
"Frankly there's been weeks when we've been doing better on outerwear and knitwear than summer clothing," said White.
Although menswear, footwear, lingerie and home and leisure product categories all showed growth, demand was concentrated on value lines or those with promotional discounts, as cash-strapped customers continued to be careful with their spending in the economic downturn.
N Brown shares were up 2 percent at 253.4 pence at 10:20 British time, valuing the business at about 720 million pounds.
"We remain positive on the shares given international potential, management quality and favourable demographic trends," said Investec Securities analyst David Jeary.
White said he expected gross margin to improve through the balance of the year, though possibly not by as much as the 50 basis points he flagged at the beginning of the year.
"I don't think the economy's going to do us any favours this year," he said. But he hopes an eventual resolution of the euro zone debt crisis will help restore consumer confidence.
"Armageddon being preached on the news and in the papers every day has a depressing effect, particularly on the older customers," he said.
(Editing by Jane Merriman and Mark Potter)
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