Return of Value

Brown (N.) Group PLC
24 January 2007


                                N Brown Group plc
                                        
          RETURN OF VALUE TO SHAREHOLDERS OF APPROXIMATELY £80 MILLION

N Brown Group plc ('N Brown' or the 'Company') announces it proposes to make 
a one-off return of value to shareholders of 27p per existing ordinary share, 
equivalent to approximately £80 million or 9.5% of N Brown's current market 
capitalisation. The return is being made using a B share structure with an 
associated share consolidation of 19 new ordinary shares for every 21 existing 
ordinary shares. The approval of shareholders is required for the return of 
value and share consolidation. Accordingly, the Company will shortly be posting
a circular to its shareholders and convening an Extraordinary General Meeting, 
expected to be held on or about 21 February 2007, to approve the transaction.

N Brown Chief Executive Officer, Alan White said: 

'Today we announced a trading update that shows a continued strong 
performance across the business despite a tough retail environment. Over the 
last few years, we have worked hard on our strategy to re-focus the company on 
its core home shopping business, and I am pleased that this has resulted in 
strong growth for N Brown in both turnover and operating profit. This has 
placed us in the position where we can make a one-off return of value to our 
shareholders, while at the same time maintaining a financial structure to 
continue to grow the business both organically and through appropriate 
acquisitions. We will continue to look at opportunities to enhance shareholder 
value on an ongoing basis.'

Rationale for the Return of Value

Over the last few years, the management of N Brown has followed a strategy to
re-focus the Company on its core home shopping business. As a result, the
Company has undergone a period of rationalisation including the divestment of
non-core operations as well as developing the home shopping business by
improving product ranges and catalogue presentation and significantly increasing
the proportion of online sales. This has resulted in a return to strong growth
in both turnover and operating profit despite challenging retail markets.

Over this period, N Brown has raised significant proceeds from the disposal of
First Financial Limited, the Group's financial services business; the
rationalisation of House of Stirling, the Group's door-to-door selling arm, and
the disposal of the Group's TV rental business and courier operations. In the 52
weeks ended 25 February 2006, turnover in the core home shopping business
increased by 10.4% to £459.6 million and operating profit was up by 11.0% at
£62.4 million. At the half year to 26 August 2006, net debt (excluding
retirement benefit obligations) stood at £105.3 million and interest was covered
a comfortable 8.5 times.

N Brown has today separately issued a trading update in which it confirmed that,
as a result of the continued momentum in sales growth the directors are
confident of at least meeting their expectations for the full year to February
2007. This excludes the exceptional costs of £0.9 million arising from the
return of value to shareholders. Both the one-off return of value to
shareholders and trading for the year to date demonstrate the continued
confidence the directors have in N Brown's prospects and strategy for 2007.

Accordingly the directors now believe that N Brown has capacity to return
approximately £80 million to shareholders while retaining flexibility to
continue to grow the business organically and to continue to make complementary
acquisitions. In determining the size of the return, the directors have sought
to achieve a more efficient and appropriate balance sheet for the Company going
forward.

If the return of value is approved, the directors have also decided to increase
the contributions towards the funding deficit in the N Brown Group Pension Fund
by paying a one-off contribution of £15 million at the same time the return of
value is made, followed by three further contributions of £4 million per annum
for three years, with the final payment being subject to review. This should
eliminate the pension funding deficit, which has been calculated at 
£26.8 million on an IAS19 basis as at 30 June 2006, over the next four years. 
The Pensions Regulator has made a determination on 23 January 2007 to issue 
a clearance statement to the directors in relation to the return of value.

The Company has entered into new debt facility agreements with HSBC and 
The Royal Bank of Scotland, which will be used to finance the return of value, 
the increased contributions to the pension fund and for general corporate 
purposes.

Key Terms of the Return of Value

The return of value consists of a capital reorganisation, including an 
associated share consolidation, and the B share alternatives.

Under the terms of the return of value, shareholders will receive:


for every 1 existing ordinary share held at the record date      1 B share; and

for every 21 existing ordinary shares held at the record date    19 new ordinary
                                                                 shares

Subject to shareholder approval, shareholders will be able to elect between 
the following alternatives in relation to their B shares.

Alternative 1 - Purchase Offer ('Purchase Offer')

Shareholders (other than US shareholders) may elect to have all or some of their
B shares purchased by Credit Suisse, acting as principal under the purchase
offer intended to be made, on or about 1 March 2007 (or such other date as the
directors may determine), at 27 pence per B share, free of all dealing expenses
and commissions.

Alternative 2 - Single B Share Dividend ('Single B Share Dividend')

Shareholders may elect to receive the Single B Share Dividend of 27 pence per B
share in respect of all or some of their B shares.

Shareholders who do not elect for either of these alternatives will
automatically be deemed to be electing for Alternative 2 and will receive the
Single B Share Dividend in relation to all of their B shares. Additionally,
Alternative 1 is not being offered into the United States of America and, as a
result, US shareholders will only receive the single dividend in respect of such
shares.

The B shares will neither be admitted to the Official List nor to trading on 
the London Stock Exchange's main market for listed securities nor will they be
admitted to trading on any other recognised investment exchange. The B shares 
will have limited rights. After payment of the Single B Share Dividend, the B 
shares will convert into deferred shares which the Company may buy back for an 
aggregate sum of one penny. A number of changes to the articles of association 
of the Company are required in order to implement the return of value.

The share consolidation will reduce the number of ordinary shares in issue in 
order to reflect the value to be returned to shareholders. Subject to normal 
market movements, this is intended to make the market price and other Company 
data such as earnings and dividends per share comparable after the return. 
The effect of the share capital consolidation should be broadly to preserve 
the value of options and awards prevailing immediately before the return, 
subject to any normal market fluctuations. New ordinary shares will be traded 
on the London Stock Exchange in the same way as the existing ordinary shares 
and will be equivalent to the existing ordinary shares in all material respects.

A circular containing full terms of the return of value and the alternatives, 
including a detailed timetable and a description of the tax consequences of 
the B share alternatives, together with notice convening an extraordinary 
general meeting of the Company will be posted to shareholders shortly, together
with a form of proxy for the Extraordinary General Meeting and a form of 
election in respect of the B share alternatives.

Alan White and Dean Moore will be hosting a conference call for analysts and 
investors at 9.00 GMT today. Participants are invited to call five minutes 
prior to this time.

Direct Dial-in number                   [phone]
Passcode                                704413

A replay facility will be available for a week following the announcement:

Direct Dial-in number                  + 44 (0) 207 136 9233
Passcode                               21186889


Credit Suisse Securities (Europe) Limited, which is regulated in the United 
Kingdom by the Financial Services Authority, is acting as financial adviser 
and corporate broker to N Brown and is acting for no-one else in connection 
with the return of value, the Purchase Offer or any other matter referred to 
in this announcement, and will not be responsible to anyone other than N Brown 
for providing the protections afforded to customers of Credit Suisse 
Securities (Europe) Limited nor for providing advice to any other person in 
relation to the return of value, the Purchase Offer or any other matter 
referred to in this document.

Enquiries:

N Brown Group plc:                                                 0161 238 2202
Alan White, CEO
Dean Moore, CFO

Credit Suisse:                                                     020 7888 8888
John Hannaford

Hoare Govett:                                                      020 7678 8000
Sara Hale

Gavin Anderson:                                                    020 7554 1400
Fergus Wylie




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