Joules warns on profits as a result of online stock availability issues
Lifestyle brand Joules today reported a fall in Christmas retail sales as a result of an online stock availability issue – and warned that profits would be below expectations as a result.
The retailer, ranked Top150 in IRUK Top500 research, said that while the business performed strongly over the Black Friday trading period, retail sales over the seven weeks to January 5 were down by 4.5% compared to the same time last year.
This was rooted in a “disappointing” fall in online sales as a result of a stock availability issue during the end of season sale event. While traffic to its website was up by 8%, conversion was down because of this stock availability issue. Joules said that the problem had now been addressed. It is now to outsource its UK logistics to a leading logistics provider, and it is moving its US distribution centre to a new partner. It said that this would add costs in the short term, but improve them in the longer-term, from the end of full-year 2021.
As a result, pre-tax profits were likely to fall below market expectations of £16.7m.
Joules chief executive Nick Jones said: “We are disappointed with our inability to fully satisfy our customers’ demand through our online channel during the important Christmas sale period. We have identified the root cause of this one-off issue and have taken steps to prevent its reoccurrence.
“Demand for the Joules brand and its unique products remains strong, with continued growth in total customer numbers and website traffic as well as robust results in our stores and partner retail channels.
“We remain focussed on continuing to expand the Joules brand and are making significant enhancements to our supply chain operations in the UK and US to deliver both future capacity growth and efficiency.”
The retailer said that while stock availability had affected its online business, it did not affect its stores and third-party concessions, where availability remained good and the business performed in line with expectations.
Superdry’s peak trading sales fall short as it stops discounting
Superdry said that despite a strong Black Friday trading, its wider peak trading performance had fallen below expectations at a time when it is trying to move away from discounting.
The retailer, now led by founder and chief executive Julian Dunkerton, said high streets had seen “unprecedented” levels of discounting amid “subdued” customer demand after Christmas.
Group revenue in the 10 weeks to January 4 was 15.8% lower than at the same time last year. Store sales were 18.5% down, wholesale was down by 16.9% and online was down by 9.3%. In its 2020 full year, 88% of store sales have been made at full price, up from 46% a year earlier, as were 44% of online sales (27% 2019). Overall, 73% of retail sales are full-price this year, up from 39% last year.
Superdry said its retail sales came in at £23m, in the wake of Black Friday, and were mostly made online. It expects that it will continue to be challenged until it has extended its new designs and philosophy to its entire range at its autumn/winter 2020 launch.
Its wholesale business shows a further £5m shortfall in sales since Black Friday as a result of “timing issues”. However, it says this is expected to reverse to some extent during the remainder of the financial year.
Julian Dunkerton, chief executive of Superdry, said: “Everyone at Superdry continues to work intensively to deliver the turnaround of the business. While we have always said it will take time, we continue to make progress in implementing our strategy. A key element of this is to focus on and return to full price sales and reduce promotional activity, and we halved the proportion of discounted sales over our peak trading period, benefitting both our margins and the Superdry brand. However this adversely affected our sales during the peak trading period given the level of promotional activity in the market. Despite this, our disciplined plan to reinvigorate the brand and return Superdry to sustainable long-term growth is on track.”
Superdry is a Top100 retailer in IRUK Top500 research.
Holland & Barrett sees healthy cross-channel demand over Christmas
Holland & Barrett saw Christmas demand grow for its health and wellness products, both online and in-store.
The retailer said that total sales in the quarter to December 31 were 4.8% up on last year. Like-for-like sales – which strip out the effect of store openings and closures – were 3.3% ahead, with online sales were up by 22%.
Holland & Barrett, ranked Top50 in IRUK Top500 research, said that sales online and through personalised subscriptions were particularly strong, thanks to “focused promotions and range extensions”. It says it is well placed to invest in its digital and technology capabilities and in extending its range of products and services.
Tony Buffin, Holland & Barrett chief executive, said, “I am pleased with the progress our support centre, distribution and store teams have made in putting customers back at the heart of our business. Our customers are increasingly telling us they want to live more healthy lifestyles, to look better and to do so without compromising on the ethically and sustainably sourced products and services they buy. H&B is ideally placed to meet these demands in growing markets and although we are still only in the early stages of transforming the business I would like to thank all of our teams for their hard work in the run up to Christmas.”
Holland & Barrett is opened by L1 Retail, which has more than 1,300 shops around the world, including more than 800 in the UK and Ireland.
JD Sports reports positive trends – especially overseas
Athleisure retail group JD Sports Fashion today said it had seen “positive like-for-like trends” in its global businesses, despite widely reported UK market challenges. However, it said that those positive trends were particularly noticeable overseas.
It said that since Christmas sales run at different times in different markets, it would not see the final results of its Christmas trading until after January. However, it expects full-year pre-tax profits to remain in the “upper quartile” of current market expectations of between £403m and £433m. It will publish its results for the year to February 1 2020 in April.
JD Sports is a Leading retailer in IRUK Top500 research
Oxfam sales rise online and in-store
Charity Oxfam says it saw shoppers go ethical over Christmas.
Sales at charity’s trading business – which sells online and through high street shops – were up by 7% in the nine weeks to December 28. It turned over £19.3m during the period, which it says means an extra £1.28m was raised for its work. That’s enough to provide emergency water supplies for more than 1.2m people. Sales of donated items on its Oxfam Online Shop rose by 11% over the nine week period
It posted its highest in-store sales since 2011 during the last full week before Christmas, this year running to December 21. Overall, online sale rose by 15% over the period, while in-store sales of its Sourced by Oxfam ethical and sustainable range were up by 13%. Bestselling items included second-hand clothing, recycled gift wrap, crackers that contained no plastic (+55%), and reusable bamboo coffee cups, lunch boxes and beeswax food wraps. Top online search terms included sequins, velvet and cashmere, while leather jackets, scarves, first edition books and cameras were also highly sought after.
Andrew Horton, Oxfam’s trading director said: “Shoppers are more and more discerning, thinking carefully about how they spend their money. Oxfam offers an affordable, ethical and sustainable alternative to other outlets. Our products are good quality and do good too.
“This Christmas sales performance is an encouraging sign that the public loves getting quality, ethical products at fair prices and that our stores are places people enjoy popping into. They are important parts of their local communities. The welcoming atmosphere is largely thanks to our staff and 20,000 inspiring volunteers who worked so hard over the festive period.”
He added: “The money raised will help us to achieve life-saving and life-improving change – from providing communities with clean water and sanitation, to helping people we work with earn a fair wage in decent conditions or cope with the devastating effects of climate change.
“With Christmas being successful, we desperately need more donations of good quality clothing and homeware to help us raise more money to do good. We rely on the generosity of the British public and donations are crucial and extremely appreciated by us.”
Image courtesy of Joules