Joules predicts £3m loss after pandemic hit

Fashion retailer Joules has predicted an underlying loss for its 2020 financial year of between £2m and £3m attributed to the impact of the coronavirus pandemic. 

In a pre-closing update ended 31 May 2020, Joules said the impact of the Covid-19 virus between March and May resulted in a “material reduction in revenue and lower group gross margin.”

The company also reported group revenue of £191m, a 12% reduction against the prior year (FY19: £218m). 

It also revealed retail sales of approximately £146m with store sales down 20%. E-commerce sales increased by 5%, with sales through the group’s own channels increasing by over 11%.

Joules said wholesale sales were “heavily impacted” by the effects of Covid-19, resulting in a 26% decrease to £42m.

From 23 March until after the period ended, the entire Joules store portfolio was closed alongside the stores of its UK wholesale partners in accordance with UK Government guidance.

Earlier this week (15 June), Joules re-opened 12 stores after a near three-month period of closure. The group said it is proceeding with store re-openings “cautiously” and has introduced several new hygiene measures in order to keep colleagues and customers safe.

Nick Jones, CEO of Joules said: “Whilst this continues to be an exceptionally challenging period for people, communities and businesses, I am delighted with how Joules has responded over recent months. 

“We were quick to adapt to the initial disruption of the Covid-19 pandemic by bolstering our liquidity position, preserving cash and focusing our trading online. We are very encouraged with the significant 40% growth in e-commerce demand during the lockdown period, which is particularly pleasing given the already established scale of our e-commerce operations.”

He added: “As we move out of lockdown and into a ‘new normal’ for retail, I am confident that Joules is exceptionally well positioned to continue to react to changing consumer behaviours and that our brand – which brightens our customers’ lives – is more relevant than ever to consumers.”

The news comes as Joules announced it had successfully agreed to add £15m to an existing credit facility with Barclays Bank, due to the coronavirus crisis.

The retailer also said it has taken a “significant” number of mitigating actions to conserve cash throughout this period of significant “global macroeconomic uncertainty”. These actions continue to involve the cooperation of many of the group’s key stakeholders including stock suppliers, non-stock suppliers, landlords, and employees.