Joules sales down 12.5% but it says it is "well positioned" to navigate further challenges
Sales at premium fashion and lifestyle retailer Joules were down 12.5% to £190.8m in the year to 30 May as it was hit by COVID-19 and previously reported e-commerce stock availability issues at Christmas.
During the year the company reported a loss before tax of £2m (pre-IFRS16 and exceptional items), down from a profit of £12.9m in FY19. Once IFRS16 and exceptional items were factored in it reported a £25.3m statutory loss.
Joules said that the COVID-19 crisis had hit sales to the tune of £31m in the final quarter of its financial year with stores sales down 21.4% for the year due to lockdown. In the first nine months of the financial year stores sales had been down 8% representing the underlying consumer shift towards digital.
E-commerce represented 57% of retail sales for the year and in nine-month period, prior to the COVID-19 crisis had represented 51%. Wholesale revenue declined 25.3% over the year, with the final quarter experiencing a reduction of around 75% as wholesale customers globally were forced to close their doors.
However the new financial year has got off to a positive start with trading ahead of management expectations. In the first nine weeks of FY21 e-commerce demand has been up more than 70% on the comparable period in prior year, while all stores are now re-opened and performing ahead of expectations. Wholesale is in line with expectations.
The company said it now had 1.43m active customers and said it had achieved record levels of brand awareness during the final quarter of the year.
Its cash position is strong with net cash of £4.5m (FY19: £5.8m) and liquidity headroom of £53m at 31 May 2020. In April the company successfully raised £15m in a share placing to shore up its cash position during the crisis.
CEO Nick Jones said he was "incredibly proud" of how the company had navigated the coronavirus crisis. "We were quick to bolster our liquidity position, preserve cash and focus our trading online, and we are very encouraged by the more than 70% growth in e-commerce 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 e-commerce 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, and I firmly believe that, underpinned by our strong brand purpose, Joules is more relevant than ever before,” Jones said.