Pre-close Trading Update
5 December 2019
Joules Group plc
('Joules' or the 'Group')
Pre-close Trading Update
Retail growth and improved retail gross margin despite challenging trading conditions
Joules, the premium British lifestyle brand, today provides a trading update for the first half of the financial year to 31 May 2020 ('H1'). The figures in this trading update are stated on a comparative basis to include the Black Friday trading period in both years ('Comparative Period')1.
Against the widely publicised challenging trading environment the Group has delivered a robust performance with revenue growth of 1.3% for the Comparative Period.
Retail revenue increased by 3.1%, with an improved gross margin rate, as a result of a disciplined approach to promotional activity. This revenue performance was driven by strong e-commerce growth that was supported by our distinctive product offer, enhancements to the customer proposition and continued growth in our active customer base.
Customers have continued to respond well to our product offer and our flexible 'Total Retail' model that seamlessly integrates the store and online experience. Following a challenging September, as experienced across the sector, we have seen positive trading momentum across Joules' own e-commerce and store channels over the last two months, with revenue up by over 9%. On the back of this positive performance the Group is opening four new stores before Christmas, in desirable locations and on attractive terms.
Wholesale revenue decreased by 3.8% reflecting the conversion of some of our larger accounts to retail concessions last year and the continued challenging UK trading environment.
International revenue continued to grow and represents approximately 17% of Group revenue in H1 (H1 FY19: 15.8%), with continued growth of our US wholesale business and very strong growth across our international e-commerce markets, demonstrating the strengthening international appeal of the Joules brand.
In September, we launched 'Friends of Joules', a curated digital marketplace for third-party sellers to sell their complementary products on the Joules website. We have seen a really positive early customer response to this exciting new initiative.
Whilst the UK trading environment is anticipated to continue to remain challenging, the performance and momentum of our retail channels and our clean inventory position as we approach the important Christmas trading period give us confidence that we will continue to deliver growth through the second half of the year.
Nick Jones, Chief Executive Officer, commented:
"Joules has delivered further profitable growth during the period despite the continued challenging trading environment. This performance again reflects the appeal of the brand, the flexibility of our 'Total Retail' model and the hard work and skill of our team who have not only helped deliver growth in this tougher climate but have also launched innovative new initiatives like 'Friends of Joules' that create future growth opportunities.
Since joining the business in September, I have been struck by the exceptional strength of the Joules brand as well as its clear potential for growth across channels, markets and product categories. We continue to invest in our proposition to meet changing customer expectations in a scalable and profitable way and, with positive momentum across both digital and physical channels, we are well placed as we enter the important Christmas trading period."
The Group will announce its Interim Results on Tuesday 21 January 2020.
1The Black Friday trading period in FY20 falls into H2 rather than H1 as was the case in FY19. The Comparative Period is 27 May to 3 December 2019 compared to 28 May to 4 December 2018. Revenue for the 26 weeks to 24 November 2019 (H1) is disclosed in the appendix below.
Appendix: revenue growth for the 26 weeks to 24 November 2019 (H1) is disclosed below:
26 weeks to 24 November 2019
Comparative growth %
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
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 is celebrating 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 September 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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