Group revenue performance during the quarter was ahead of the board’s expectations at GBP39.6m (US$50.3m)

Group revenue performance during the quarter was ahead of the board’s expectations at GBP39.6m (US$50.3m)

The board of British clothing retailer Joules says it is encouraged by the group's performance with sales ahead of expectations, despite an 18% decline on last year.

For the 13 weeks from 1 June to 30 August, overall group revenue tumbled to GBP39.6m (US$50.3m), reflecting the impact of Joules' stores, and those of many of its wholesale partners, being closed for a large part of the period due to the Covid-19 pandemic.

The group commenced the phased reopening of its store estate on 15 June with all stores reopened by early August.

Retail revenue declined by 5% although retail sales through the group's owned retail channels increased by 1.5%, supported by a strong product and promotional offer. Joules continued to deliver a strong performance online with e-commerce revenue (including third parties) increasing by 45% against the prior year. Revenue from the group's own e-commerce channels surged 63%.

Since their reopening, Joules says its stores have performed well with strong levels of customer conversion supporting a sales performance ahead of the board's expectations and just 10% lower than the comparable prior year period. This reflects the well-balanced geographic locations of the group's retail stores, pent-up customer demand for Joules, and a strong promotional offer to help drive footfall, it notes.

For the first quarter overall, including the impact of enforced store closures, retail store sales declined by 49%.

"We are encouraged by the group's performance in the first quarter of the financial year with sales ahead of our expectations," says CEO Nick Jones. "This is testament to the flexibility of the Joules model and the increasing strength, relevance and awareness of the Joules brand.

"The group's strong e-commerce performance demonstratesthe appeal of Joules as well as our growing customer base and we continue to be very encouraged by the performance of our Friends of Joules digital marketplace. In addition, we have been pleased with the performance of our stores since reopening with higher levels of conversion when compared to pre-lockdown and steadily improving footfall trends.

"As with all consumer-facing businesses we face challenging trading conditions and unprecedented levels of uncertainty over the coming months and into the peak Christmas trading season. Against this backdrop we remain cautious on the future trading outlook and will continue to tightly manage costs and conserve cash. Notwithstanding this, we remain confident that – underpinned by the strength and relevance of our brand – Joules remains well positioned to continue to adapt to changing consumer behaviours."

Emily Salter, retail analyst at data and analytics company GlobalData, notes Joules has proved its resilience and the strength of its brand appeal as its retail revenue only fell by 5%, protected by strong sales growth online despite already high online penetration (57% in FY2019/20).

"This was nearly able to offset a 49% decline in retail store sales, with Joules' shops reopening gradually from mid-June to be fully opened by early August. Stores performed ahead of the board's expectations, as the retailer will have benefitted from its significant presence in smaller towns where footfall has been more resilient than in larger towns and cities. The retailer has also been protected by its focus on casualwear, which will continue to be an outperformer in clothing and footwear as consumers are once again encouraged to work from home."

She adds wholesale put a dampener on Joules' results as revenue fell by 59%, with sales via department stores in the US such as Nordstrom and Dillard's slow to recover.

"As Joules places an increasing emphasis on its own channels, it should assess which retailers it works with, with US department stores struggling before Covid-19 as they continue to lose relevance among shoppers. Retail sales through Joules' owned retail channels grew by 1.5%, boosted by a 63% rise in sales through its own online platforms. This is testament to the retailer's 'Total Retail' model as its online channel has been able to cope with increased demand; as well as its distinctive style and wide product proposition that resonates with shoppers."

Meanwhile, Salter says as Joules approaches the festive period and it is expected that consumers will be denied the chance to celebrate as usual due to the additional restrictions in the UK including the 'rule of six', it is well positioned to benefit from increased spend on causal, cosy and versatile items as opposed to partywear.

"Additionally, the retailer reported that its Friends of Joules marketplace is trading well and will to continue to do so as many consumers will focus on giving smaller, more thoughtful gifts, and wish to continue to support independent businesses."