Joules impacted by softer trading as it reveals it is talks with founder on new investment
Joules has reported making good progress with its turnaround plan but said trading has been softer in recent weeks.
The fashion lifestyle brand said sales in the 11 weeks to 30 October were behind expectations due to the impact of the UK economic environment on consumer confidence. Although sales in categories such as dresses, menswear and more formal products performed well, larger core categories including outerwear, wellies and knitwear, were held back by milder than expected weather.
Online sales were also behind forecasts due to softer ecommerce traffic, although in-store sales were slightly ahead.
Speaking of its turnaround plan, Joules said the simplification of its wholesale operations and exit from EU and US territories is almost complete and that it now has a new “leaner, simpler” organisation and leadership structure in place.
It also revealed that channel cost and margin optimisation changes will be completed by December while a revised trading, promotion and buying execution approach is well underway.
In addition, the brand has made changes to its product process and sourcing model.
Joules said the trading underperformance means its working capital position is below expectations. It had previously announced that it is assessing its ongoing financing requirements, including a possible equity raise, to strengthen its balance sheet. The company said it has now moved forward on discussions with a number of strategic investors, including Tom Joule, to provide a cornerstone investment in an equity raise. However, it is also exploring alternative options with the assistance of Interpath Advisory, including CVA planning.
The company said: “It is the group’s intention to commence consultation with key stakeholders, including suppliers, on the turnaround plan including potential alternative options, should they be required.”
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