By guest author Sahar Nazir from Retail Gazette
- Joules posts pre-tax loss of GBP 2 million compared with a GBP 12.9 million profit in the previous year
- The decline was due to stock availability issues over Christmas and the coronavirus lockdown.
Joules has swung to a loss in its full year results as the “challenges” of the Covid-19 crisis continued to affect the business.
The lifestyle and fashion retailer recorded a pre-tax loss of GBP 2 million for the 53 weeks to May 31, compared with a GBP 12.9 million profit in the previous year.
Joules said the swing to loss was due to stock availability issues over Christmas and the coronavirus lockdown.
Group revenue at Joules dropped by 12.5 % year on year to £190.8 million.
Prior to the coronavirus pandemic, store sales were down by around eight % year-on-year.
This first half drop increased to a 21.4 % drop for the full year.
Meanwhile, wholesale revenue dropped 25.3 % during the year, and was down 75 % in the final quarter.
However, online sales were up 11 % for the year, accounting for almost 57 % of total retail sales.
The retailer ended the period with a net cash of £4.5 million and liquidity headroom of £53 million.
Since reopening stores from June 15, Joules said it was “confident” that its model put it “in a strong position to be able to adapt to the way to customers choose to interact with our brand going forward”.
It also said it would continue to review its store portfolio, and more than a third of stores have a lease event in the next 18 months.
“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 ecommerce demand and the performance of our stores since reopening,” Joules chief executive Nick Jones said.
“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.
“While 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.
“While 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.”
Joules has 128 stores across the UK.