Joules Group plc
('Joules' or the 'Group')
AGM Trading Update
Encouraging Q1 performance despite challenging trading conditions
Joules, the premium British lifestyle brand, provides a trading update covering the 13 weeks from 1 June 2020 to 30 August 2020 (the "Period") to coincide with the Group's Annual General Meeting being held today. Comparables are made on a year on year basis, unless otherwise stated.
The Board is pleased with the Group's encouraging performance during the Period despite the highly challenging trading backdrop. Group revenue performance during the Period was ahead of the Board's expectations at £39.6m, with revenue from the Group's own e-commerce channels increasing 63%. Overall Group revenue was down 18% reflecting the impact of Joules' stores, and those of many of our wholesale partners, not being open for a large part of the Period. Brand awareness and brand health metrics1 have continued to track ahead of the prior year and the active customer base2 has continued to grow, driven by new customers within both online and store channels, demonstrating the relevance of the Joules brand to a growing customer base.
Retail revenue declined by 5% although retail sales through the Group's owned retail channels increased by 1.5%, supported by a strong product and promotional offer. The Group continued to deliver a strong performance online with e-commerce revenue (including 3rd parties) increasing by 45% against the prior year. This strong performance reflects increased customer traffic to Joules' websites and improved conversion rates. In addition, Friends of Joules, the Group's digital marketplace has continued to perform very well with customers responding well to the enhanced product offer.
The Group commenced the phased reopening of its store estate on 15 June with all stores reopened by early August. Since their reopening the Group's stores have performed well with strong levels of customer conversion supporting a sales performance ahead of the Board's expectations and just 10% lower than the comparable prior year period. This reflects the well-balanced geographic locations of the Group's retail stores, pent-up customer demand for Joules, and a strong promotional offer to help drive footfall. For the Period overall, including the impact of enforced store closures, retail store sales declined by 49%.
Wholesale sales were in line with the Board's expectations and reduced by 59% reflecting the anticipated slower recovery of the wholesale channel. Feedback on the spring/summer 21 product range from wholesale customers across our global wholesale markets has been positive.
As a result of the Group's encouraging trading as well as management's continued tight control of costs, Joules had net cash of £8.5 million at the end of the Period, which was significantly ahead of the Board's expectations and up from the year end position of £4.5 million. The Group has liquidity headroom of £57 million and is therefore well positioned to manage potentially challenging trading conditions over the coming months.
Group inventory of £38 million was 16% lower than the prior year reflecting good sell through of spring/summer 2020 ranges and a more cautious buy for the early phases of autumn / winter 2020 stock.
Nick Jones, Chief Executive Officer of Joules commented: "We are encouraged by the Group's performance in the first quarter of the financial year with sales ahead of our expectations. This is testament to the flexibility of the Joules model and the increasing strength, relevance and awareness of the Joules brand.
The Group's strong e-commerce performance demonstrates the appeal of Joules as well as our growing customer base and we continue to be very encouraged by the performance of our Friends of Joules digital marketplace. In addition, we have been pleased with the performance of our stores since re-opening with higher levels of conversion when compared to pre-lockdown and steadily improving footfall trends.
As with all consumer-facing businesses we face challenging trading conditions and unprecedented levels of uncertainty over the coming months and into the peak Christmas trading season. Against this backdrop we remain cautious on the future trading outlook and will continue to tightly manage costs and conserve cash. Notwithstanding this, we remain confident that - underpinned by the strength and relevance of our brand - Joules remains well positioned to continue to adapt to changing consumer behaviours."
1 Brand Awareness and Brand Health are measured as part of an independent YouGov consumer survey
2 Customer registered on our database who has transacted in the last 12 months
Joules Group plc
Nick Jones, CEO
Marc Dench, CFO
Tel: +44 (0) 1858 435 255
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
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. The business also sells ever-growing collections of homeware, eyewear and lifestyle product ranges through both its licensing partnerships and 'Friends of Joules', the brand's online marketplace that brings together hundreds of creative businesses to give customers everything they could ever need for a contemporary country lifestyle.
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.
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 128* 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
• Joules' performance has been recognised through a number of awards including:
o Mainstream Brand of the Year - Drapers Awards 2019, 2017 and 2016
o Best Licensed Fashion or Talent Brand Award - Brand & Lifestyle Licensing Awards 2019
o Best Licensed Gifting Product Award - Brand & Lifestyle Licensing Award 2019
o The Best Fashion Retailer (Mark of Excellence) - Retail Week Awards 2019 and 2018
o Fashion Retail Business of the Year (between £101m-£500m turnover) - Drapers Awards 2018 and 2017
*As at 31 May 2020, excluding concessions and franchises (33 concessions and 3 franchise stores)