* Turnover up 5.1 percent in 18 weeks to July 4
* Gross margin down 1.5 percent, decline offset by savings
* Sees full-year margin up 0.5 percent
* Comfortable with FY profit forecasts of 87 million pounds
* Shares down 1 percent at 0811 GMT
(Adds detail, CEO comments, shares)
By James Davey
LONDON, July 7 (Reuters) - British home shopping firm N Brown Group Plc posted a slight slowdown in its rate of sales growth but said on Tuesday it expected its gross margin to rise over the full year.
The Manchester, northwest England-based group, whose catalogues including Simply Be, Oxendales, Marisota and Jacamo are mainly aimed at older people, said its turnover increased 5.1 percent in the 18 weeks to July 4.
The outcome was in line with analysts' forecasts and compares with sales growth of 6.1 percent in the eight weeks to April 25.
Its gross profit margin was down 1.5 percent, having been down 1.2 percent in the previous eight week period, driven by an increase in bad debts.
However, N Brown said the rate of growth in money owed by customers had slowed to 8 percent from 13 percent at its end-February year end, and said the margin decline had been offset by cost savings and reduced interest charges.
Chief Executive Alan White said he expected the group's gross profit margin to rise by about 0.5 percentage points in the year to end-February 2010.
"It will be a tale of two halves on the gross margin, with a decline in the first half and then a significant improvement in the second-half," he told Reuters in an interview.
STRUCTURAL GROWTH
White said the anticipated improvement as the year progressed reflected an expectation that provisions for bad debt in the second half would not match those of the same period in the previous year.
Shares in N Brown have increased in value by 17 percent over the last year, outperforming the UK general retailers index by about 2 percent.
The stock was down 1 percent at 216-1/2 pence at 0811 GMT, valuing the business at about 575 million pounds ($933.3 million).
"N Brown offers structural growth, positive earnings momentum ... strong, stable balance sheet and defensive niche positioning with high customer retention," said analysts at Citi in a research note.
Many of Britain's retailers have struggled over the past year as cash-strapped shoppers have cut spending amid rising unemployment, sliding house prices and fears of a long and deep recession.
N Brown has fared better than most, helped by its market position as a specialist in larger-sized clothes that are unavailable from most retailers, which it sells to an older customer base with more stable incomes.
White said he was comfortable with the consensus of analysts' forecasts for a full-year profit of about 87 million pounds given by Reuters Estimates, up from 82.7 million the previous year. (Editing by Miles Neligan and David Holmes)