Rising debt takes toll on N Brown

BAD debts are continuing to dog troubled home-shopping group N Brown, which today insisted it was making progress despite a 16% slide in half-year profits.

The group said poor trading at its weekly door-to-door sales arm, House of Stirling, was masking improvements in its core mail order division.

Losses at House of Stirling spiralled to £4.2m in the six months to 28 August after a 'significant' rise in bad debts.

Chairman Lord Alliance blamed a 'deteriorating performance' from cash collectors and consequent drop in the amount of credit available to customers.

Sales in the division plunged 36% to £9.2m.

The setback meant pre-tax profits for the group as a whole fell £4.1m to £21m despite signs of an albeit muted recovery in mail order, which generates 75% of the group's overall sales.

Sales in this area, which caters for the larger woman, nudged up 0.7% to £206.3m on the back of a successful clothing range for younger shoppers.

Lord Alliance said: 'The management team has worked hard during the first half and made good progress towards delivering a sustained performance.'

Shares in N Brown closed last night at 119p, 20p above the 99p year-low in July.

The recent rise has come amid speculation of a management buyout.

Alliance and his family own 43% of the equity.