Joules sales, profits head skywards, as online soars, international business grows
There’s a perception in UK retail at present that anyone in fashion retail is struggling. But that’s clearly not the case. Many companies are going from strength to strength and most of them are industry-disrupting newcomers.
But some more ‘traditional’ businesses are also powering ahead. Joules is one of them and it’s making those waves by a clever mix of the traditional and the ultra modern, as it latest set of full-year results showed on Wednesday.
The company sells a traditional-meets-contemporary women’s, men’s and kids product mix with a focus on British heritage and unique prints. But it does so with a clear focus on omnichannel and it’s certainly reaping the rewards of this strategy.
The results announcement for the 52 weeks to May 28 reads like one long triumphal parade. Just look at the figures. Group revenue rose 19.6% to £157 million and was up 18.6% on a constant currency basis. Strong product, as well as cost controls and margin improvements helped underlying profit on an Ebitda basis rise 25.3% to £16.9 million and underlying pre-tax profit rose an even stronger 34% to £10.1 million.
Now, they may not be the kind of figures that an M&S, Next or Burberry might celebrate, but they clearly show a company with massive potential. And that potential was certainly being realised during its first full year as a listed business.
The company, which started out in 1977 as a family firm selling country-style clothing at equestrian and country shows, is making the most of the omnichannel revolution. In the last year it saw e-commerce sales rising 29.4%. Admittedly, many in the UK retail sector are enjoy strong e-tail sales growth at present but a rise of close to 30% is hugely significant given that e-sales now account for 34.8% of Joules’ total turnover.
In the last year, Joules added new e-tail functionality making it easier for customers to shop and pay and continued to increase the use of personalisation. Traffic from mobile and tablet devices grew, representing over 75% of the total number of visitors and it continued to see improved conversion rates. Click & Collect and Order in Store also proved more popular with its customers.
And the Order in Store service highlights just how multichannel this company is with store sales remaining a major focus. Physical store sales were buoyant last year even as UK shoppers increasingly shunned other brands’ brick-and-mortar locations. Joules’ store sales rose 17.5%, supported by it having an extra 11 stores this time.
It sees significant further growth potential for the brand in the UK and Ireland, it said Wednesday, adding that it’s targeting 10 to 12 net new stores a year in the medium term, as well as relocating a number of existing stores to larger sites that better reflect its brand and product range.
The importance of physical stores to the firm was also underlined by its wholesale growth with total sales up 20.3%, or 17.6% at constant currency. And while many of its wholesale customers are UK and Ireland-based, this channel is crucial for the firm’s push into international markets, especially the US, Germany, France and other European countries. Sales internationally increased 36.2% last year and now make up 11.5% of total group revenue. That may be a relatively small percentage now but this is clearly a company with a mission - and fast international growth is a big part of that.
Last fiscal year it further expanded its presence in Dillards in the US, launching kidswear for the AW16 season, and in Nordstrom, where it increased its overall product range listings and the number of doors.
In Germany it continued to perform in line with expectations and experienced good growth in the independent retailer segment where it now has over 400 stockists.
CEO Colin Porter was understandably upbeat. He said the success was down to the firm’s “steadfast focus on its growing and loyal customer base” as active customer numbers rose 14% to 907,000, as well as “product quality and delivering engaging experiences across all channels.”
He’s confident that the momentum “will continue into FY18, despite the uncertain macroeconomic outlook,” partly due to new store opening plans plus “a robust autumn/winter wholesale order book both in the UK and internationally, and positive early feedback on our spring/summer 2018 ranges from wholesale customers.”
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