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Joules CEO 'confident' despite market uncertainty

Joules is in a strong position to weather “market uncertainty” and plans to strengthen its international wholesale partnerships following a successful year of trading, chief executive Colin Porter has said.

The British lifestyle brand reported a 19.6% year-on-year rise in group revenue to £157m for the 52 weeks to 28 May (up 18.6% on a constant currency basis). Underlying EBITDA was up 25.3% to £16.9m.

It generated a pre-tax profit of £8.9m, including exceptional costs relating to its IPO in May 2016, compared with a £1.2m loss the year before.

Porter told Drapers: “Despite ongoing uncertainty in the wider market, we are focusing on what we can influence to drive growth, which are consumer needs and the quality of our product. We are in a great position and are confident that we will see continued growth in the year ahead.”

Porter said the business would be “less affected” by reduced consumer expenditure than other clothing retailers given its ”geographically [dispersed]” store portfolio and “longstanding wholesale customer accounts”.

He pointed out that Joules’ properties have short lease terms, allowing for ”relative flexibility to close or relocate stores should it become necessary”.

Porter outlined plans to develop its foothold in travel, where its existing partners include cruise lines and holiday village network Center Parcs.

“This would involve expanding our clothing and accessories offering, as well as forming new partnerships in the travel arena,” he added.

Although Joules is not looking to expand beyond the UK, US and Germany in the short term, Porter said it is “eying opportunities” to strengthen its position with international wholesale partners.

As part of this, the business plans to extend its existing deal with German etailer Zalando later this year. In future Joules will own its stock and Zalando will be responsible for housing and fulfilling it, changing from a model where Zalando both owns and fulfils the stock.

During the year Joules converted its wholesale arrangement with Next Label to a “commission” model, in which Joules pays commissions on sales while Next holds the stock. Porter said this arrangement has allowed for “more collaboration” on catalogue releases and product selection.

Joules opened 13 new stores and closed two during the year. At 28 May, it had 108 stores in the UK and Ireland, and more than 1,500 stockists worldwide.

 

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