Despite global plans, the man behind Joules remains rooted in its English rural heritage.
Tom Joule is a man with a plan. A five-year plan, which incorporates everything from stores and wholesale to click-and-collect and retailing on far-flung international shores.
His lifestyle business has come a long way since 1989 when Joule sold his first products at a small horse show in Leicestershire. It now turns over almost £80m a year from 78 stores and more than 500 wholesale accounts in the UK and Republic of Ireland. As one of this year’s Christmas winners - revenues in the nine weeks to January 5 increased 24.5% - and with a £22m investment secured in November from LDC, a private equity arm of Lloyds Banking Group, Joules is in fine form to enter its next stage of growth.
“I’ve been doing this now for 25 years and I’ve made loads of mistakes along the way, but you learn from all of that and you’ve got to do what’s right for the business at the right time,” says Joule, tucking into a slice of carrot cake and a pot of tea in his father’s rustic coffee shop, which is next door to the first Joules store in his home town of Market Harborough in Leicestershire.
“I don’t think we would have had the infrastructure to take private equity money earlier,” he says. “There’s a sense of responsibility as you’ve got to give them a return.”
LDC has taken a minority stake in Joules as a result of the deal, a move which Joule said has brought an “uplifting feeling” into the business.
“Staff love the fact we’ve all been working hard on putting together a five-year plan, which we are five months into. We’ve gone out to the market and got enough money to support that plan so we can deliver it,” he explains. “At the end of the day Joules is bigger than one person - it employs 1,400 people. So you’ve got to make sure you’ve got the right investment, the right support from the bank and the right management. And I feel, for the first time in a long time, that I’m sure of all of those things.”
With LDC on board Joule is fully focused on his five-year plan, starting with international expansion - the company is now in six countries including the UK, after launching in Singapore and South Korea 18 months ago. It was already in Germany and the US, where it is targeting growth, and France. Using franchise partners for retail and agents to sell via wholesale, the international business now accounts for 5% of turnover and is growing.
“Internationally we are ahead of plan. We are getting some good results from kidswear. Overseas retailers love the quirky twist on country [style],” he says, referring to the brand’s jumpers featuring farmyard animals and wellies decorated with floral prints. “There are some really good signals but everything is really considered.”
Joule opted for South Korea to gain a foothold in the Asian market: “It is quite a forward-thinking market. They love British products, and if we can make it work in Korea then we see it as a really good entry into the other markets.” Wellington boots and kidswear have been bestsellers across the globe, boosted by the brand’s very British heritage. Womenswear makes up 60% of sales, with menswear and kidswear contributing 20% each.
Despite the international focus this does not mean Joule is taking his eye off his home market, and he is plotting a plethora of openings. Since Joule’s interview with Drapers at the end of last year the company has opened further stores in Nottingham and Dorchester, helping it stretch closer towards its ideal 100-store mark.
“I think 100, strategically, is right for us, because we want to keep it special,” explains Joule. “We’ve been opening or relocating between 12 and 16 stores a year since 2005.”
Joule adds that the 100-store target will allow the retailer to have a good spread of stores across the country, with shoppers also able to benefit from its click-and-collect service that came into effect from autumn 2013. Joule describes the latter as like having an “extra good shop” in terms of sales.
Multichannel is another point up high on the agenda for Joule. “We’ve been multichannel but we’ve not acted multichannel,” he says. “We want to be at the point where customers can return in store and we want our online platform to be the very best it can be,” he adds, referencing the fact that currently customers cannot return online purchases to physical stores.
Although there is a focus on Joules’ own retail arm, wholesale is still a strong side of the business, making up 30% of sales. In its latest annual accounts in the year to May 26, 2013, wholesale sales increased 9%, or £1.9m, during the year, edging towards £25m. Total turnover grew 19% to £79m as EBITDA more than doubled to £7.4m.
Wholesale stockists have also reaped the rewards of Joules’ popularity.
Jo Hooper, head of womenswear buying at John Lewis, says: “We partnered with it a number of years ago and are absolutely thrilled with the way the growth has come through both our businesses.”
Jersey department store Voisins opened a 1,800 sq ft Joules concession in November. Managing director David Elliott says part of the reason he likes the business so much is because of the people. “It’s very much a family brand,” he says. “There is a great synergy across the categories from men’s and women’s to children’s.”
He adds: “Our customers love Joules. I love all the animal motifs and bright colours. It just makes you feel cheerful as you walk into the department and are assaulted by all the colours.”
One way Joules keeps its wholesale market happy is through exclusive product, with 40% of the wholesale collection exclusive to stockists. “Ideally in my head I’d like to separate wholesale and retail far more,” says Joule. “[But] we don’t want to take great things we’re going to be doing in retail and not offer them to wholesale. The great thing about doing retail and wholesale ranges is that if you find something that sells really well in your shops then the following year you can roll it out to your wholesalers. That is the beauty of it, so you’re not giving them duffers, you are giving them things you know you can stand behind.”
In a move to continuously better the service to stockists, Joule also wants to up the level of product supplied close to season in order to react quickly. Currently 10% to 20% of the wholesale collection is supplied on this basis but Joule says 50% would be ideal. In order to shift that percentage up he has moved some manufacturing away from China and into Turkey. For autumn 13 Joules also launched footwear made in the UK and is planning to source knitwear from Leicestershire.
Although Joule may want to react to upcoming trends, he is not a slave to the catwalks. “We always go back to our original [equestrian] lifestyle every season,” he says. “We never ask what’s on-trend and then trace it back to what we stand for.”
Joule says around £5m of turnover comes from shows and events such as Badminton Horse Trials and Hampton Court Flower Show, which give him a chance to conduct lots of market research. “I stand in front of my customers and watch them and see what they actually wear when they’re walking the dog. You can’t get better market research than that and that is the edge we have,” he explains.
“We do fashion with a small f, not a big F. That is where the success comes from.”