N Brown profits plunged to £16.2m in the year to March 3 after it had to shell out £40m in compensation to customers
Flawed insurance products caused profits at plus-size retailer N Brown to shrink 72 per cent last year.
They plunged to £16.2million in the year to March 3 after the Simply Be owner had to shell out £40million in compensation to customers.
N Brown said ‘flaws’ in some insurance products sold between 2006 and 2014 meant cash flow will be hit again this year.
The group makes a third of its revenues from financial services products like short-term loans, which charge sky-high interest rates of 58.7 per cent.
Revenues at its financial services division grew 3.5 per cent last year and there is a trial of interest rates of 30 per cent for new customers.
Sales jumped 4.1 per cent to £652.6million at the online retailer, which also owns JD Williams and Jacamo, where sales rose 3.2 per cent and 5.1 per cent respectively.
Angela Spindler, chief executive, said Simply Be was still the star performer as sales grew 16.3 per cent.
‘A good performance in financial services enabled the group to continue to invest in our customer offer, successfully driving revenue and market share growth.’