A flexible and agile business model has been the key to Joules success in the current difficult trading climate, CEO Colin Porter has told Drapers.
Revenues for the six months to 25 November increased 17.6% to £113.1m. Profits before tax for the period are now expected to be slightly ahead of initial expectations.
“Our model is really flexible and agile,” said Porter. “It caters to changing customer behaviour. We have a strong ecommerce business and great store proposition, and we partner with the right wholesale partners and concessions. We are putting ourselves where customers choose to shop.”
Retail revenues for the period rose by 21.2% to £79.9m. Ecommerce sales now make up almost 50% of Joules’ retail sales. Wholesale grew by 32.5% to £32.5m, fuelled by international markets including the US and Germany. International sales now make up roughly half of all wholesale sales for the brand, and 16% of the group’s total revenue.
Porter said the business is focused on getting its proposition right to counter the tough market: “We’re not immune to the challenging environment, but we focus on our strengths and what we can control. The brand resonates well with customers, but we have to ensure our product is unique and different in terms of colour and print. We need to focus on our own brand, product and business model.”
Joules has put contingency plans in place to mitigate the expected disruption that could arise in the event of a hard Brexit. These include establishing a European Union-based third-party distribution facility; scheduling earlier in-bound product deliveries for spring 2019 ranges; preparation for expected increased administrative activities; and hedging US dollar requirements more than 12 months forward.
Chief financial officer Marc Dench said: “We have been thinking about adding a European third-party distribution centre for a while, but Brexit was the catalyst. We are doing it earlier than we would have.
“We want to make sure we are not impacted by any duties or issues at the ports, so we will be ready to move stock before the end of March. We want to control the areas we can without any incremental costs.
“The uncertainty [caused by Brexit] isn’t good for any retailer or brand, but we need to focus on our proposition.”