10 January 2020
Joules Group plc
('Joules' or the 'Group')
Joules, the premium British lifestyle brand, today updates on the Christmas trading performance of its retail business for the seven-week period to 5 January 2020 (the "Period"), as well as on its outlook for the financial year ending 31 May 2020.
As confirmed in the Group's Pre-Close Trading Update dated 5 December 2019, the Group performed in line with the Board's expectations during the first half of the financial year and delivered a strong sales performance over the Black Friday trading period.
However, retail sales¹ over the seven-week period as a whole were significantly behind expectations and decreased by 4.5% against the prior year (FY19 comparative period: +11.7%). This was a result of disappointing online sales performance due to an internally generated stock availability issue through the important end of season sale event, the cause of which has now been addressed. Encouragingly, traffic to the Group's website grew by 8%, however conversion was significantly down due to the stock availability issue.
The Group's other retail channels, including stores and third-party concessions, where the Group had good stock availability, performed in line with expectations.
Supply chain update
To support further growth of the brand, the Group has taken strategic decisions in relation to its supply chain operations: establishing an outsourcing partnership with a leading logistics provider to operate and enhance the Group's UK logistics operation and also transitioning our US distribution centre to a new partner. These initiatives will incur incremental non-recurring costs during the transition phase but are expected to deliver significant cost benefits from the end of FY21 onwards.
The Group also expects second half cost headwinds as a result of US-China tariffs, which it expects to continue into next year.
Taking the above into account, the Board anticipates that FY20 Underlying PBT² will be significantly below market expectations³.
Nick Jones, Chief Executive Officer, commented:
"We are disappointed with our inability to fully satisfy our customers' demand through our online channel during the important Christmas sale period. We have identified the root cause of this one-off issue and have taken steps to prevent its reoccurrence.
Demand for the Joules brand and its unique products remains strong, with continued growth in total customer numbers and website traffic as well as robust results in our stores and partner retail channels.
We remain focussed on continuing to expand the Joules brand and are making significant enhancements to our supply chain operations in the UK and US to deliver both future capacity growth and efficiency."
Joules will announce its Interim Results on Tuesday 21 January 2020.
¹ Retail sales including VAT and returns received, or anticipated, from sales in the Period. Retail sales in this statement include Stores and E-commerce channels, both owned and concessions, but exclude the Shows channel
²Underlying PBT before share-based payments, exceptional items and impact of IFRS 16
³Company compiled consensus of £16.7 million
Joules Group plc
Tel: +44 (0) 1858 435 255
Nick Jones, CEO
Marc Dench, CFO
Hudson Sandler (Financial PR)
Tel: +44 (0) 20 7796 4133
Peel Hunt LLP, Nominated Advisor and Joint Broker
Tel: +44 (0) 20 7418 8900
Liberum Capital Limited, Joint Broker
Tel: +44 (0) 20 3100 2000
This announcement contains inside information within the meaning of the Market Abuse Regulation. The person responsible for arranging release of this announcement on behalf of Joules is Marc Dench, Chief Financial Officer.
Joules - a premium lifestyle brand with an authentic British heritage
Established in Britain by Tom Joule three decades ago, Joules is a premium lifestyle brand with an authentic heritage.
The Joules story began in 1989, when Tom Joule started selling clothing on a stand at a country show in Leicestershire. Today, it is a true multi-channel lifestyle brand; its products are available through its e-commerce websites, retail stores, at rural shows and events and wholesale channels both in the UK and internationally.
Joules carefully designs and sells clothing, footwear and accessories for women, men and children, as well as ever-growing homeware, eyewear and licensed product collections.
The brand's values of quality, Britishness, family and humour, coupled with its unique use of colour and print set Joules apart. This approach, along with an unwavering attention to detail and drive to surprise and delight its customers with unexpected details, has been central to the brand's success and remains at the heart of everything Joules creates.
During 2019 the brand celebrated its 30th birthday, marking three decades of Joules delivering fun, quality clothing for families and friends to make lasting memories together.
Joules Fast Facts
· Joules is an international brand, available in the UK, USA, Germany and other international markets
· Joules has a significant online business, operates across 124* stores in the UK and ROI across a range of location types and has a well-established wholesale business with over 2,000 stockists worldwide
· Joules' talented in-house print design team lovingly hand-draw all the prints and unexpected unique details you see within its collections each season
· Joules is proud of its British heritage and still has strong roots in Market Harborough, the site of its first shop and head office - since day one
· Nick Jones joined the business as CEO in October 2019, whilst Tom Joule continues to focus on the creative side of the business in his capacity as Chief Brand Officer
· Joules' performance has been recognised through a number of awards including:
· Mainstream Brand of the Year - Drapers Awards 2019, 2017 and 2016
· Best Licensed Fashion or Talent Brand Award - Brand & Lifestyle Licensing Awards 2019
· Best Licensed Gifting Product Award - Brand & Lifestyle Licensing Award 2019
· The Best Fashion Retailer (Mark of Excellence) - Retail Week Awards 2019 and 2018
· Fashion Retail Business of the Year (between £101m-£500m turnover) - Drapers Awards 2018 and 2017
*As at 24 November 2019, excluding concessions and franchises (33 concessions and 3 franchise stores)
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