Group revenue has decreased by 1.4% to £111.6 million at Joules, according to interim results for the 26 weeks ended 24 November 2019, while statutory profit before tax dropped to £1.7 million from £9.3 million in the same period of 2018.
Joules said this was “after non-cash exceptional impairment charges of £6.7 million, relating to stores, Head Office premises and changes in distribution arrangements.” The company also noted that results were impacted by the timing of the Black Friday trading period, which was in H2 in FY20 but in H1 in the prior year.
The news comes after a disappointing Christmas trading period at the brand due to online stock availability issues, along with non-recurring costs associated with supply chain initiatives and China-US tariffs.
Nick Jones, Chief Executive Officer, said: “Joules delivered a robust first half sales and margin performance in line with expectations, which was pleasing in the context of a challenging consumer environment and widespread discounting by other clothing brands and retailers. This performance reflects the appeal of the Joules brand, our growing customer base and the flexibility of our ‘Total Retail’ model.
“During the Period, we invested further in our infrastructure and customer proposition in order to support long-term sustainable growth. This included the roll-out of our new point of sale system across our store estate, enhancing the future profitability and flexibility of our store channel, progressing our new Head Office development, and launching our ‘Friends of Joules’ marketplace. Post period end, this investment has continued with the announcement of improvements to our future logistics capability in the UK and US.
“Since the period end, we have updated on our disappointing Christmas trading performance, resulting from a stock availability issue impacting our online channel. We identified the root cause, have taken steps to rebalance the allocation of stocks between channels for Spring / Summer 2020 and are strengthening our underlying processes. I am reassured by the performance we saw in the retail channels where we had good stock availability and by our continued online traffic growth, evidencing the strong customer demand which continues to exist for the Joules brand.
“Since joining Joules in September, I have been impressed by the strength of the brand, the flexibility of our multiple routes to market and our fantastic teams. I am confident in the opportunities for long-term sustainable growth of the Joules brand across multiple territories and I am excited to lead Joules through this next chapter of growth.”