Digital growth offsets sales decline in stores at Joules

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Total retail revenue through Joules’ own-branded retail channels was up by 0.3% in the seven-week period to 3 January 2021, against the prior year, with the growth in Joules e-commerce sales more than offsetting the decline from stores.

Total retail sales through Joules’ websites, including sales through the Friends of Joules digital marketplace, increased 66% year on year. This was driven by traffic growth and improved conversion rates across the Group’s digital platforms. The strong e-commerce performance highlights the continued strength of the Joules brand and its product proposition, which comprises its core Joules clothing, footwear and accessories collections alongside the highly complementary and relevant Friends of Joules digital marketplace offering.

Total store sales declined by 58% during the period, reflecting the enforced closures of non-essential stores and reduced footfall as and when stores were able to remain open. During the periods that stores were able to trade, revenue was 23% lower when compared to the corresponding prior year periods, reflecting lower overall footfall trends, in particular over the last two weeks of the period.

The Group’s brand awareness and brand health metrics showed continued improvements during the period and the active customer base continued to grow, with over 1.5 million active customers at the end of the Period. Pleasingly, this progress was achieved despite the closure of many of the Joules stores for extended periods.

At 3 January 2021, the Group had net cash of £13 million and total liquidity headroom of £63 million.

Outlook

Following the national lockdown across England, Scotland and Wales and the enforced closures of non-essential retail stores, all the Group’s stores are currently closed. Whilst the duration of these restrictions is uncertain, if they were to continue through to 1 dApril 2021, the potential loss in Group revenues resulting from the closure of its stores, the cancellation of country shows and disruption to wholesale partners is estimated to be  in the range of £14 to £18 million.

The Board anticipates that the potential adverse sales impact from this new period of non-essential retail closures will be partially mitigated in the full financial year to 30 May 2021 due to:

  • better than expected sales and profit performance in the seven months of trading up to 3 January 2021;
  • continued strong momentum of Joules digital platform sales, driven by growth in the Group’s active customer base, the relevance of the product offer and investments in our distribution centre completed in the last 12 months; and
  • ongoing benefits from cost reduction activities, including head office costs and lease renegotiations

The Board believes the Group’s strong balance sheet will enable it to navigate the current climate and emerge in a strong position.

The Group intends to provide its next update with its Interim Results on 28 January 2021.

Nick Jones, CEO of Joules, commented: “We are pleased with the continued strong performance delivered across our digital channels during the Christmas trading period and are encouraged by the increasing customer awareness of, and demand for, the Joules brand. This has been supported by our Friends of Joules digital marketplace which added a great range of products and gifting options for customers throughout the Christmas trading period.

Whilst the latest round of restrictions on store retail across the UK present a further challenge for the retail sector as we enter 2021, we remain very confident that Joules, as a highly relevant, digital-led brand with an engaged and growing customer base and healthy balance sheet, is well positioned to navigate these challenges. As a result, we remain as excited as ever by our long-term growth prospects.”