UK retailer Joules' active customer numbers up 10%

In the group’s previous trading update on July 19, 2022, it reported significant pressure on gross margins with consumer appetite weighted towards mark-downs amidst a heavily promotional environment.

Over the subsequent five weeks (to 14 August), trading has softened materially. The recent extremely warm and dry summer weather has adversely affected full price sales of core categories such as outerwear, rainwear, knitwear, and wellies and has compounded the ongoing subdued consumer demand due to the well-documented cost of living crisis. Retail sales have consequently been depressed over this five-week period, resulting in an 8 per cent year-on-year reduction in retail sales in the 11 weeks of the current financial year to date, the company said in a press release.

Wholesale trading for the Joules brand has achieved 10 per cent growth year-on-year despite delays experienced in US ports, however garden trading wholesale has continued to be significantly impacted by the wider slowdown in the home and garden market.

Retail margins in the year to date have declined by c.6 per cent pts year-on-year. This reflects the shortfall of full price sales and the level of discounting that has been required to engage customers in the highly promotions-driven retail landscape. While overall margins have been weak in the year to date, we expect partial recovery in the coming months as sales of full price Autumn/Winter collections become a more important part of the mix.

As at the end of July, the group’s net debt was £21.1 millio, leaving headroom under its bank facilities of £11.4 million. Since then, the group has completed documentation of the previously announced £5 million addition to its borrowing facilities. This will be available until November 2022, to help support the group’s working capital requirements over its forthcoming seasonal borrowing peak. The group will continue to manage cash resources carefully and expects to have sufficient liquidity to manage its working capital requirements including repayment of the extended facilities in November 2022.

The group expects to require a waiver of certain covenants on its facilities and is currently in positive discussions with its bank in this regard. The group also continues to have positive discussions with its bank on its medium-term financing, including a review of covenants to enable progress on the previously announced business simplification and cost reduction measures. 

Fibre2Fashion News Desk (RR)