Professor Glen Arnold

                                                                            So far in the N Brown (LSE:BWNG) analysis (see last few Newsletters) we have a dividend yield […]

With owner earnings we are trying to obtain the earnings that, in future, would be left for shareholders after the managers’ use of the cash generated to pay for items of expenditure to maintain the strength of the economic franchise (e.g. additional capital items, additional working capital, marketing spend, R&D and staff training) and to […]

N Brown (LSE:BWNG) carries over £500m of bank debt.  For a company with a market capitalisation of around £400m that seems a lot.  It makes sense to investigate the risk of financial distress. Balance sheet The balance sheet gives the game away on the two-businesses-in-one nature of N Brown.  In round terms, what we see […]

N Brown (LSE:BWNG) trades through 11 brands, three of which are “Power Brands”: J D Williams, aimed at 45-60-year-old women; Simply Be, for fashionable size 12-32 women, and; Jacamo for menswear.  It is also building up the Ambrose Wilson for women 60 and over and hinting that this will become a Power Brand in the […]

The way I see N Brown’s (LSE:BWNG) business model is that it sells clothes etc., to people at below cost as a deliberate strategy. That is, it makes a gross margin on the items it sells of around 52% (i.e. if it buys a dress from China for £28.80 it sells it to a Brit […]

I’ve more than doubled my stake in N Brown (LSE:BWNG) at £1.30 per share following the release of the preliminary results a couple of weeks ago. It fits nicely into my Modified price earnings ratio portfolio. I first bought N Brown shares last August at £1.42, so I’m pleased to pick up more at an […]

Just before I move on to post some analysis about a UK company (tomorrow’s newsletter) I thought I’d reproduce Warren Buffett’s ideas on how managers should be rewarded by shareholders.  The points are as profound yet simple today as they were back in 2005 when they were written down in Buffett’s letter to Berkshire shareholders. […]

Warren Buffett initially invested $600m of Berkshire Hathaway’s cash in Gillette’s preferred stock giving a 8.75% yield way back in 1989. It wasn’t until 2005, after the preferreds had been converted to Gillette common stock and then to shares in P&G, that he committed any more money, when he topped up his P&G holding with […]

When Duracell was bought by Gillette in 1996 for $7.8bn it was the market leader in alkaline batteries; it’s brilliant marketing, with the Duracell Bunny, had created a global brand. Duracell accounted for one-quarter of Gillette’s sales.  But it didn’t take long for competitors to offer cheaper versions; a price war ensued and two years […]

In international markets, Gillette and Procter & Gamble face a mighty competitor in the Anglo-Dutch giant Unilever, with its terrific range of personal care and food products.  Unilever was bigger than both the American companies in many countries and enjoyed greater leverage with retailers. Jim Kilts, CEO of Gillette approached P&G with a plan to […]