Joules warns of ‘significant’ loss
Joules has said its trade softened in the five weeks to 14 August after the UK’s extremely warm and dry weather adversely affected full price sales of core categories such as such as outerwear, rainwear, knitwear and wellies.
This means that the lifestyle fashion retailer has posted an 8% year-on-year reduction in retail sales in the first 11 weeks of its current financial year and now expects to post a significant loss in its first half.
Trading at the company has also been impacted by ongoing subdued consumer demand and the cost of living crisis.
In contrast, wholesale trading increased by 10% year-on-year despite delays experienced in US ports. However, the retailer’s Garden Trading wholesale business has continued to be significantly impacted by the wider slowdown in the home and garden market.
Joules is expecting its performance to improve in the second half as the benefits of business simplification begin to be realised. However, it currently anticipates that it will deliver a full year loss before tax, and before adjusting items, significantly below current market expectations.
Giving an update on liquidity and covenants, Joules said it has completed documentation of its previously announced £5 million addition to its borrowing facilities. This will be available until November 2022 to help support its working capital requirements over its forthcoming seasonal borrowing peak.
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