Joules upbeat despite new lockdown, e-tail drives trading, is ready for Xmas rush

By

Sandra Halliday

Published
Nov 5, 2020

On a day that included a flurry of results statement and trading updates from listed UK retailers, Joules was one of the winners as it said the positive trends highlighted in an earlier update in September have continued. 

It said trading has been “encouraging” in the first 22 weeks of the financial year that ends on May 31 next year. That’s the period to early November.

This has been driven by strong year-on-year e-commerce growth of 35%, with e-commerce revenue accounting for 70% of the group's retail sales in the period. Its stores also “performed ahead of the board's expectations” in those five months with sales since the re-opening of stores in July down by ‘only’ 18% year-on-year. Its wholesale and international sales have also performed in line with expectations, but it didn’t say what those expectations were.

It’s clearly in a relatively good place at the moment, despite stores having to close again due to the English lockdown. Its active customer base has now grown to 1.5 million and “new to brand” customer growth has been “particularly strong in recent months, benefiting from focused digital marketing investment; the positive impact of the Friends of Joules digital marketplace; and the desirable lifestyle locations of many of the group's stores”.

Its balance sheet also remains strong with net cash of £9.4 million and liquidity headroom of £57 million at November 1.

And even with the lockdown starting on Thursday, it believes it’s “on track to deliver its expectations for the FY21 financial year”.

The company added that as the lockdown starts, all store staff in England have been placed on furlough. Stores in Scotland and Northern Ireland remain open and its Welsh shops will reopen on November 9 at the end of the short lockdown there.

CEO Nick Jones said: “Joules has continued to trade well. As we enter the peak trading season, the retail sector in England faces the challenge of having to close non-essential stores for the next four weeks. Despite this difficult backdrop, Joules has a very strong brand and a flexible business model, which has underpinned the robust performance to date during Covid-19. In addition, we are well positioned from an operations and financial perspective, having built on the experience and lessons from the spring lockdown.”

He added that its AW20 collections “have been well received by customers and our Friends of Joules digital marketplace continues to deliver growth ahead of our expectations”.

In e-tail, it has made significant investments in capacity. Hopefully, this should help it avoid the supply issues it faced last festive season that dented its turnover during that crucial trading period.