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EDITORIAL How retailers from Hotel Chocolat to Joules and Made are altering course in the face of challenging headwinds

How are successful retailers navigating challenging times? Image: De Visu/Shutterstock

In today’s InternetRetailing newsletter we’re reporting as retailers face into fresh headwinds as they emerge from a pandemic into inflationary challenges. Many traders were buoyed by the shift online that had a profound effect on shopper behaviour during the pandemic and planned for a new way of buying. However, while many businesses are now handling online sales at higher levels than before the pandemic, they are now finding that they need to alter their course as costs rise following Covid-19 shipping delays and the Russia-Ukraine war. 

Today we report as Hotel Chocolat reports strong sales growth but warns of a full-year loss as it scales back international expansion and closes its stores in the US market to trade online instead.  The retail brand, citing a fast-changing and challenging market, says it will instead focus on digital and customer loyalty in its core UK market. 

Joules says it’s continued to see retail sales grow in the opening weeks of its financial year – but that profitability remains under pressure as shoppers opt for markdowns in a “heavily promotional environment”. Nonetheless, it expects that adjusted pre-tax profits will be slightly ahead of market expectations as it has been able to reduce its costs. The retail brand is already looking to reduce its wholesale business and to make more of its sales direct to its customers.

In the Style today reports fast sales growth in a year in which it launched more social influencer collaborations – but, at the bottom line, a pre-tax loss as costs – from the supply chain to distribution – rose. The social influencer-led brand, which bills itself as a fashion disruptor, launched 193 collaborations with 27 social influencers during the period. That included its biggest ever launch night, in April 2021 in collaboration with Stacey Solomon, with whom it also launched its first sustainable collection during the year.

Made today warns that faltering consumer confidence, supply chain inflation and the cost of clearing excess stock could mean a full-year loss of between £50m and £70m. It is reviewing its operations and headcount as it looks to cut costs, and is also looking at options to strengthen its balance sheet. 

At the same time, however, a study from Tribe Payments suggests that 40% of multichannel and ecommerce retailers plan to open shops in the next three years as they look to improve the customer experience. 

Today’s guest comment comes from Fabrice Haiat of YOOBIC who considers how store staff can prepare now for hyper-experiential retail in the future.

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