TIDMJOUL
RNS Number : 5410W
Joules Group plc
19 August 2022
19 August 2022
This announcement contains inside information within the meaning
of the Market Abuse Regulation.
Joules Group PLC
("Joules" or the "Group")
Trading & Business Update
Joules, the premium British lifestyle group, provides a trading
and business update in respect of the period since the end of its
financial year to 31 May 2022.
Recent trading and outlook
In the Group's previous trading update on 19 July 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% year-on-year reduction in retail sales in the 11 weeks of
the current financial year to date.
Wholesale trading for the Joules brand has achieved 10% 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%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.
Active customer numbers now stand at over 2 million which is a
10% increase on last year. Brand awareness is also up by 2.5%pts
year-on-year to 47.3%(1) . The Group continues to make good
progress with its initiatives to simplify the business and improve
profitability as outlined in previous statements.
As a result of the recent softness in trading and the current
weak consumer sentiment set out above, the Board expects a
significant loss in the first half, followed by an improved
performance in the second half as the benefits of business
simplification begin to be realised. In light of this, the Board
currently expects the Group to deliver a full year loss before tax,
and before adjusting items, significantly below current market
expectations.
Liquidity and covenants
As at the end of July, the Group's net debt was GBP21.1m,
leaving headroom under its bank facilities of GBP11.4m. Since then,
the Group has completed documentation of the previously announced
GBP5m 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.
Next Group plc discussions
Further to the announcement on 7 August 2022, the Group
continues positive discussions with Next Group Plc about both
adopting its Total Platform services to support its long-term
growth plans and a potential equity investment. There can be no
certainty that these discussions will lead to any agreement, and
further announcements in this regard will be made if and when
appropriate.
The Group now intends to release its results for the financial
year ended 31 May 2022 in late October 2022.
Enquiries:
Joules Group plc Tel: +44 (0) 1858 435 255
Ian Filby, Non-Executive Chairman
Nick Jones, CEO
Caroline York, CFO
Hudson Sandler (Financial PR) Tel: +44 (0) 20 7796 4133
Alex Brennan
Lucy Wollam
Charlotte Cobb
Tel: +44 (0) 20 7418 8900
Peel Hunt LLP, Nominated Advisor and
Joint Broker
George Sellar
Andrew Clark
Tel: +44 (0) 20 3100 2000
Liberum Capital Limited, Joint Broker
John Fishley
Edward Thomas
The person responsible for arranging release of this
announcement on behalf of Joules is Caroline York, Chief Financial
Officer.
(1) Brand Awareness based on YouGov survey where respondents are
asked if they have heard of specific brands
Joules - a premium lifestyle group with an authentic British
heritage
Joules is a premium lifestyle brand and group with an authentic
heritage and values of family, fun and joy in the countryside.
Joules creates and curates exceptional products that brighten the
lives of its customers, delivered through leading digital platforms
and supported by enticing experiences and stores that are located
in desirable locations relevant to the Joules customer's
lifestyle.
The Joules story began in 1989, when Tom Joule started selling
clothing on a stand at a country show in Leicestershire. Today, the
business designs and sells Joules-branded clothing, footwear and
accessories for women, men and children as well as collections of
homeware, toiletries, lifestyle and pet product ranges that are
carefully designed and developed through selected licensing
partnerships. Each collection comprises Joules' distinctive use of
humour, colour and unique prints, each of which is hand-drawn by
the brand's talented in-house print design team at its headquarters
in Market Harborough, Leicestershire.
In 2021, Joules acquired leading digital home and garden
retailer The Garden Trading Company, strengthening its position in
the important and fast-growing home, garden & outdoor category.
Similarly inspired by the British countryside, Garden Trading
designs and sells distinctive products through its own e-commerce
platform and many wholesale partnerships across the UK.
Joules' distinctive design-led products are complemented by an
increasingly broad customer offer provided through its digital
marketplace 'Friends of Joules' that enables third-party brands to
offer curated, complementary products to the Joules customer base,
enhancing Joules' digital platform with thousands of products from
hundreds of creative businesses to give customers everything they
could ever need for a contemporary country lifestyle.
The Joules group caters to its more than 2 million active
customers through its own digital platforms, its retail stores in
the UK and at country shows and events. Joules extends its brand
reach through well-established third-party relationships -
concessions, online marketplaces, and traditional wholesale.
www.joules.com
www.gardentrading.co.uk
www.joulesgroup.com
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END
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August 19, 2022 02:00 ET (06:00 GMT)
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