Joules’ annual results for the 53-week period ending 31 May 2020 reflect strong ecommerce demand during the UK lockdown; up more than 70% on the comparable period in the prior year.
Furthermore, all stores have now re-opened and overall performance is ahead of expectations. Wholesale is also performing in line with expectations. The company’s strong financial position sees it with net-cash of £5.4 million and liquidity headroom of £54 million on 2 August 2020; significantly ahead of management’s expectations.
Continued progress on strategic initiatives
The brand’s ‘Friends of Joules’ digital marketplace is providing increased range and choice to Joules’ customers. UK and US distribution centre transformation initiatives are also complete, providing improvements to capacity, service levels, and productivity.
Elsewhere, a new store point of sale platform has been implemented, further integrating the store experience with the brand’s digital channels under its flexible ‘Total Retail’ model.
FY20 performance
Group revenue decreased by 12.5% to £190.8 million (FY19: £218.0m) adversely impacted by Covid-19 and the previously reported ecommerce stock availability issue over the Christmas trading period. The estimation of revenue impact of Covid-19 in the final quarter is c.£31 million.
However, ecommerce performed well, with Joules’ own ecommerce channel revenue up c.11% for the year. Ecommerce represented nearly 57% of retail sales (FY19: 49.5%). For the first nine months, pre-Covid-19, it represented nearly 51% of retail sales.
Store revenue also declined 21.4% for the year. Over the first nine months, pre-Covid-19, store sales declined c.8%, reflecting structural industry trends and reduced promotional activity. Wholesale revenue declined by 25.3%, with the final quarter experiencing a reduction of c.75%, as wholesale customers globally closed their operations in response to the pandemic.
The Group’s pre-tax loss for the 53 weeks to May 31 stands at £2 million
Commenting is Nick Jones, chief executive officer of Joules. “I am incredibly proud of how Joules has responded and adapted to the recent disruption caused by the Covid-19 pandemic. I would like to again thank our colleagues for their hard work, our customers for their continued loyalty, and our partners for their collaboration throughout this challenging time.
“We were quick to bolster our liquidity position, preserve cash, and focus our trading online. We are very encouraged by the more than 70% growth in ecommerce demand since the start of the new financial year, as well as the performance of our stores since reopening. This is testament to the strength of the Joules brand, the relevance of our product range, the desirable locations of our stores, and the flexibility of our model.
“Whilst the Group’s financial results for FY20 were impacted by challenging external trading conditions in the UK throughout the year; the stock availability issue that, as previously reported, impacted our ecommerce sales over the Christmas trading period; as well as material Covid-19-related disruption during the final quarter, I am very pleased with the continued progress we have made against our long-term strategic goals.
“We have further strengthened our flexible ‘Total Retail’ model; enhanced our UK and US supply chain operations to support our growth plans; and launched Friends of Joules, an exciting new digital marketplace.”
“Whilst the retail sector will continue to face challenging trading conditions over the coming months, I believe that Joules is very well positioned to navigate both the existing and potential further Covid-19-related challenges and continue to invest in targeted growth opportunities. The Joules brand’s awareness and health metrics have never been stronger. I firmly believe that, underpinned by our strong brand purpose, Joules is more relevant than ever before.”
For further information of Joules Group, please click here.
